lesson

Mar

2021

Money Lessons You Wish You Learned in School

Reading Time: 4 minutes

Did you know that the number one cause of stress is money? According to several studies, more people worry about money compared to health, family, work or relationships. This is true regardless of age, citizenship, gender, career, educational attainment and even amount of income. There is only one explanation to all this, most people do not have a deeper understanding on how to handle money. After all, not all parents teach their children how to handle money. In addition, money management is not part of the school curriculum. If only it was taught in school. We would not have to learn the hard way. For this reason, there are some money lessons you wish you learned in school.

The Rat Race

Have you heard of the rat race? In finance, a rat race is the endless pursuit of money. It is called a rat race because it is likened to a mouse who keeps on running around in circles chasing the cheese. People in the rat race will have financial difficulties if they stop working. Unfortunately, most people are in the rat race. Worldwide statistics show that out of 100 persons who will retire, only 3 persons will be comfortable and only one will retire wealthy. Life would have been financially better if only we learned about financial literacy long before we started earning. How about you, what will your retirement look like?

Money Lessons You Wish You Learned in School

1.Money is Just a Tool

Mindset is the single most important thing that makes a person rich or poor. Thus, personal finance lessons should always start with instilling the proper mindset. Our mindset is a product of our environment. It is our belief based on what our parents and teachers taught us. Do you have a millionaire mindset or a poverty mindset?

In order to be wealthy, you got to think like the rich. One of the ways in which rich people think differently is the way they view money. For the rich, money is just a tool.

Have you heard of the saying that “Money is the root of all evil”? Most people believe that money is something bad and that rich people are greedy. This belief came from misconceptions on some bible passages. It is not money per se which is bad; rather, it is the love for money. It is people’s attachment to the trappings of wealth that makes it bad. Money should be viewed as just a tool, not as something negative. If you have money, you will be able to buy things that you need and want. Money can also be used to help other people.

2. Money Buys Choices

Money does not buy happiness, what it does buy are choices. With money, you will have unlimited options. You can choose the job that you want, where you are going to live, what car you want to drive, where do you want to go and how you are going to spend your days without constraints and worries. In short, money gives you freedom to choose.

3. There are Other Streams of Income Aside from a 9-to-5 Job

Since young, we have been programmed to do the following:

Study Hard.
Get Good Grades
Earn a Degree from a Prestigious University
Get hired into one of the Top 500 Companies
Climb the Corporate Ladder
Save Money
Buy your Dream House and Car
Retire and Receive Retirement Money from Company

There is nothing wrong with this formula except that it is NOT the only roadmap to success. There are many other streams of income aside from being an employee. You can earn a living by starting your own business. You can earn from different kinds of investments like stocks or stock options. Nowadays, you can even earn money by becoming a professional blogger, YouTuber or online gamer. There are endless possibilities available out there.

4. You can Make Money Work for you

Schools teach students how to work for money. In school, students learn different knowledge and various skills. Most of them are catered towards the specific field of your choice. Engineering students learn technical and problem-solving skills. Medical students study about the human anatomy and physiology and illnesses. Law students specialize about the laws and legal issues. After school, students are well- equipped with all these technical skills, but how many are really ready for the real world? As a result, many people ended up working for money. Unfortunately, a diploma from a prestigious university is never a guarantee of wealth. But rather, it is all about understanding how you can make money work for you opposed to learning how to work for money.

Out of all the graduates, how many actually learned about money management? How about debit and credit? How about investing? These are crucial finance lessons that one needs to know to be successful in the real world.

Without any formal personal finance instruction in our high school or college curricula, many college seniors who graduate in the red continue to make common financial mistakes that only exacerbate their debt burdens.
– Alexa Von Tobel

5. Saving Money Alone is Never Enough

We were taught the importance of saving money even at a young age. However, did you know that saving money is never enough because of an economic phenomenon called inflation? Inflation is more than just a number. It affects all of us. That is why it is important that you understand what inflation is and how it affects your finances.

Inflation happens when there is a persistent increase of the prices of goods and services which will ultimately lead to the decline of the purchasing power of your money. This means that every year the value of your money is decreasing. That is why savings alone is not enough. You need to learn to invest your money too. As a rule of thumb, the interest rate of your investments should be greater than the inflation rate.

Click here to read more money lessons you wished you learned in school.

Edited Version. First published in Pinoy Smart Living on 09.17.2019

Photo by Karolina Grabowska from Pexels

Oct

2020

Lessons Learned from COVID-19

Reading Time: 4 minutes

The COVID-19 pandemic took everyone by surprise. No one was fully ready despite numerous warnings from scientists for a possible pandemic for decades now. Moreover, a lot of people dismissed it as an isolated case that would probably be contained in one area, just what happened in the past with the SARS, bird flus and swine flus. But the inevitable happened. The virus spread from Asia to Europe and to the Americas at a very rapid pace. And soon, everyone on the planet just woke up to a whole new world. As of this writing, more than 35 million people around the world has already been infected with over a million deaths. We can no longer undo the past but now is the time to learn the lessons from the devastating experience. As we look forward to reliving our life again in the new normal, here are lessons learned from Covid-19.

1.Health is Wealth.

People don’t generally take care of their wealth especially when young. it is common knowledge that health is the most important thing in life. Yet people only starts thinking about their health when there is already some form of illness or disease. This is because it is hard to resist unhealthy eating habits and behaviors. The pandemic reminded us to take care of our health.

In New York state, more than 80% of the total Covid-19 deaths have underlying illnesses.

Covid-19 has been dubbed as a ‘lifestyle virus’. This is because a great majority of those hospitalized, with severe symptoms and those who died have underlying illnesses. And these underlying illness are mostly lifestyle illnesses, or those illnesses associated with a person’s lifestyle. Hypertension, heart disease, diabetes, obesity and cancer are some of the lifestyle illnesses.

If we want to survive this health crisis, it is now time to rethink and change our lifestyle. Develop habits that will improve our immune system so our body can naturally be able to combat viruses and other illnesses.

2. Proper Hygiene

Good personal hygiene is the best way to protect yourself from the virus. A simple act as washing your hands with soap and water can be a life-saving action. Not only does it protects you, it also protects others. The practice of good personal hygiene can prevent you from spreading the virus to others.

3. Importance of an Emergency Fund

Because of Covid 19, many people faced reduced hours while some even lost their jobs and businesses. Unfortunately, not all people from around the world received government aid. The pandemic is not simply just a health crisis, it is also a very challenging time financially for most people. Just imagine what happened to those families who do not have an emergency fund set aside.

Going forward, now is the time to seriously consider setting aside a portion of your future income as an emergency fund. The rule of thumb is to save at least 10% of your income a month. The money jar budgeting system is the best guide on how to budget to ensure that you are ready for the next emergency.

4.Importance of Diversification

If you are a stock market investor, you probably watched in horror as the market dropped significantly. Investing in one company or one industry alone would have hit you badly especially if that industry has been greatly hit. Examples of such industries are airlines, tourism and hospitality. But if your portfolio is diversified, like you also have investments in health care or consumer goods, then you have minimized your losses. The market is very volatile and unpredictable. Diversification is the only way to manage risk.

Diversification is also applicable to all kinds of investments from real estate to businesses. For example, you invested all your money in a restaurant chain. And that restaurant closed down because of the lockdown. Another example is what you invested all your money on real estate rental properties. And because of the pandemic, the tenants all left leaving you with no income. And worse, you still have to pay mortgages for the properties. With diversification, all these scenarios could have been prevented. Always remember to not put all your eggs in one basket.

5. Having People and Healthy Relationships

Ever since the outbreak, most people have been spending their time at home. This is the perfect opportunity to spend more time with family and loved ones. It is ideal for those people who have healthy relationships with people close to them. But what about those people who have not so good relationships with their family? Being trapped at home for months with people that you cannot stand and fight with can be a nightmare.

It is the same thing for people who live alone because they don’t have living social interactions with others. In a study done by Martina Luchetti from the Florida State University College of Medicine, they found out that living alone increase the feelings of loneliness.

6. Respecting Other’s Personal Space

Respecting other people’s space is one thing that we normally taken for granted. With Covid-19, we learned how to respect other people’s space. When someone goes near us, we feel uncomfortable. In the same way that they feel uncomfortable too if we get near them. That’s why we become conscious of our space and other people’s space.

7.Having Goals and A Routine

Having daily goals and a routine is good for your mental health. Goals will give you something to look forward to. Instead of dwelling on the uncertainties of the now, your focus shifts to a dream of a better tomorrow. A routine on the other hand is a good way to combat boredom. It is also an effective way to make you feel in control during times of great stress. It will keep you busy and takes your mind off things.

8. Importance of Gratitude

With all the negative things happening around, it is so easy to fall prey into negative thinking. Instead of reading the news or opening your social media account, why not start your day with gratitude. Gratitude shifts thinking away from the negative and into the positive. Instead, gratitude makes you focus on your blessings.

How about you? What lessons have you learned from this whole Covid experience?

Photo by cottonbro from Pexels

Jul

2020

Valuable Life Lessons from The Alchemist

Reading Time: 7 minutes

Feeling lost in life? Then, The Alchemist by Paulo Coelho is for you. One of the best-selling books of all time, the Alchemist is about the story of a young shepherd boy, Santiago and his quest to find treasures in the pyramids. The story is more than just your typical fiction stories. It is a philosophical book that will give you a better understanding of what life truly is all about. It is about listening to your heart, chasing your dreams and pursuing your destiny. There are so many powerful and valuable life lessons from The Alchemist that every person should read this book at least once in their life.

Here are 10 Valuable Life Lessons I’ve learned The Alchemist.

1. Life is Continuous Learning

Life is a continuous learning process. We can only grow us a person if we broaden our horizon and discover new things. Santiago knew this. Although a shepherd boy, Santiago loves to read books. He was able to dream of faraway places because he read about them.

Santiago also listens and seeks advice from people who are smarter than him. Throughout his journey, he met people along the way that served as his mentors – the king, the merchant, the Englishman and the alchemist.

Sadly, many people stopped learning after school. That is the reason why they got stuck in life. Others are too proud to ask advice from others. They think they know everything. The moment you think that you know everything is the start of your downfall.

The only true wisdom is in knowing you know nothing.
– Socrates

Santiago also learns from experience. His quest for the treasure was not smooth sailing. He made mistakes along the way but he learned from them.

There are so many valuable lessons to be learned throughout your life’s journey. Master the lesson. If you think that you have the same problem over and over again, that is because you have not learned the lesson yet. This applies in all aspects of your life whether it be your finances, career, health and even your relationships. Learn the lesson from past events, apply it and move on.

2. Always Look at the Bright Side

Santiago always find the good things in a bad situation no matter how big or small it is. Instead of complaining about how he had to carry the weight of his jacket in the heat of the sun, he remembered how that jacket kept him warm during winter nights. Likewise, he could have wallowed in self-pity when he lost everything in Africa; but he chose to change his perspective. Instead of looking at himself as a victim, he looked at himself as an adventurer in a foreign country.

In both cases, notice that both situations can be viewed negatively. But Santiago chose to look at them differently. Instead of of the negative, he looked for the positive. It is all about the mindset.

3. Follow your Dreams

Ever since Santiago was a child, he wanted to travel the world. His parents wanted him to become a priest. Rather than adhering to his parents’ wishes, he summoned enough courage to talk to his dad to tell him that he wants to do something else in life. Instead of becoming a priest, Santiago decided to become a shepherd so he can travel.

That’s the problem with most of us. We become victims of other people’s definition of success. We follow a different path because that is what our family and society expected from us. As a result, we lost track of our destiny. What used to be very clear when we were young seems to be impossible when we grow up.

The thing is no matter how successful we become with our chosen path, there will always be a feeling of emptiness. You will never be truly happy if you are not doing your purpose in life. Destiny is what you always want to accomplish. If you feel that something is lacking despite having everything, that is life’s way of telling you that you are not doing what you were born to do.

Follow your passion. Wherever your heart is, there you will find your treasure. Pursue your destiny if you don’t want to spend the rest of your life with regret.

4. Give 10 Percent

Giving a tenth of your income to others is a form of gratitude to God for all the blessings that we have received. We have an obligation to share a portion of what we have. The only way for us to receive more blessings is when we learn to give first. Don’t promise to give what you don’t have yet. If it is hard for you to give when you have little, it will be harder to share when you have more. Give 10% of what you have right now.

5. The Simplest Things in Life are the Most Extraordinary

The secret to happiness is to be able to appreciate the beauty of your day to day life. It is seeing the wonders of the world and the beauty of the little things that we normally take for granted like the flowers, the scenery and the people around us.

Happiness is never about the destination but rather it is about enjoying the journey. Each day matters. Every second counts. Learn to love everyday. Show the people around you how much you care. It’s all about mindfulness.

Towards the end of our life, the simple things like the time we spend with our family is what truly matters. True happiness boils down to the quality of our relationship with others. It is best that you cherish every moment while you still can.

6. Negative Things Happen in Life Because They Prepare our Spirit and our Will

Bad things happen to everyone, even to good people. These things happen not because we are being punished but because they are necessary for our growth. The pain that we experience in our lives actually prepares our spirit and our will in realising our destiny.

The road to the fulfilment of our dreams is never easy. There will be bumps along the way. Sometimes, we will be forced to make detours. We need to make some adjustments but the destination remains the same. The important thing is to keep on going forward. Once we have succeeded in overcoming life’s challenges, we become better persons.

You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever.
– Steve Jobs

The roadblocks that we will encounter are all part of a master plan. They all happened for a reason. It is difficult to understand at the moment but everything will make sense once you have found your treasure.

7. When you Want Something, All the Universe Conspires in Helping you Achieve it

Have you heard of The Secret? The Secret is actually the Law of Attraction. It states that if you really want something and you focus your thoughts on that, the universe will give it to you.

This belief system has been mentioned several times throughout the book, that there is a force out there that guides us. Whether you call it God, the Universe or the Soul of the World; that force is always nearby especially to those who wants to realise their destinies.

We should learn to recognise the omens or the signs and follow them. Sometimes, it appears as a solution or an idea. Sometimes, it presents itself as a direct message from somebody whom you are having a conversation with. Remember, there is no such thing as coincidence. There is a reason why you bumped into an old friend or why you are reading this article right now. We have to listen to what the universe is telling us. We also need to listen inward to our intuition.

In the same way, that if you think that the world is out there to get you, negative things will start happening your way. Thus, you have to be careful of what you think and what you say. In the story, when the monk told the alchemist that his payment goes well beyond his generosity; the alchemist quickly told the monk not to say it because life is listening. What the alchemist meant was that the universe responds to thoughts; thus, the monk might receive less next time.

8. Persistence is the Key

The road to our destinies is never easy. Only those who are persistent will be successful.

There were numerous times when Santiago could have just given up, when he lost everything in Africa, when he had enough money to go back to Andalusia after working for the merchant or when he met Fatima in the desert oasis; but still he persevered.

Your treasure can only be uncovered after a series of tests. The closer you get to your dreams, the harder it will become. It takes a lot of courage, patience and persistence to finally be able to achieve your destiny.

9. Success Happens Outside your Comfort Zone

Santiago was already traveling as a shepherd boy but he sold his flock of sheep to go to Africa. After a year in Africa, he already earned enough money to either stay there or to go back to Andalusia but he chose to go to the desert. While in the desert oasis, Santiago had met the love of his life and earned the respect of the community but still, he opted to continue his quest for the treasure.

In all three scenarios, Santiago was already successful and comfortable with his life but he gave them all up to continue his journey and pursue his destiny. Just what do you think would have happened in the story if he decided to stay in his comfort zone. Do you think, he would have found his treasure?

In reality, many people don’t like change or are scared of change. As much as we want to pursue our dreams, we are more scared of disappointment. We are scared that we might lose everything that we have worked for if we are going to start anew. We would rather stay in our comfort zone. This is the reason why people get stuck in life whether it is a bad relationship or a job that they don’t like. Fear is one of the biggest obstacles that is keeping us from achieving our dreams.

10. Everyone has His Own Destiny

If a person is successful in one area, it does not mean that you too will be successful in that same area. It is because each person has his own destiny to fulfil. His way is not the same as yours. So, don’t compare yourself with others.

No matter who we are, everyone has a central role to play in the history of the world. Each one of us is unique. Embrace your uniqueness. As the Englishman said, we all can’t become alchemist, otherwise, gold will lose its value.

Good luck on your journey and I hope you find your treasure!

First published in Pinoy Smart Living on 08.24.2018

Feature Image from Free Image and mbll from Pixabay Images.