Must-read for all women entrepreneurs

What woman doesn’t want to build a million dollar (or peso) business? Susan Solovic gives meaningful, practical advice that I wish I’d read before venturing into business. This book stays by my bed for my daily dose of inspiration. If you’re a woman, if you’ve ever had to face any obstacles trying to start a business or you’ve been wanting to bring your business to the next level but don’t know how to, this book is a perfect guide to help you along the way. It won’t give you all the ingredients but you likely wouldn’t be as lost if you did.

Practical advice you can actually put to use

Every chapter is a mix of wise advice you’d expect to hear from a compassionate mentor, inspiring stories of women who did things right or learned things the hard way but you get to “cheat” by reading about their past mistakes now, and “how-to’s”. My favorite “how to” is the media planning – oh and finding funding, too.

Lovers as business partners

I’ve read through the book and didn’t see an anecdote about women venturing into business with their boyfriend or husband. Scratch that, there was one, but it didn’t have a happy ending. Is this scenario rare, taboo, or just plain not advisable? There was an issue of Entrepreneur that featured couples in business, such as the Havaianas importers – though they’re married.

More anecdotes, more successful women to emulate

I just love love love to hear about women who’ve built and grown sustainable businesses. It’s not exactly something you learn at school, is it? I never really thought about it growing up, or in college. I always looked up to women CEOs who were running multinationals – it never occurred to me how those businesses even got started? I want more stories, more inspirational examples.

Local women entrepreneurship programs

This book got me thinking whether there was a local program to encourage women entrepreneurs? I’ve read about a lot of micro-financing loans for women selling in the palengke but for brick-and-mortar businesses that have a business model other than peddling?

• Chit San Juan, ex-CEO of Figaro hosts talks every so often.
• NEWomen organizes bazaars, talks, and regular networking sessions
• GE Money Bank, affiliate of the giant General Electric, launched a Women Entrepreneurs website – though I haven’t heard of any financing programs

Any others?

Every month, and as long as my budget will allow, I will read a new personal finance book and share with you my learnings and insights.

Feedback for Die Broke:

Die Broke authors Stephen Pollan and Mark Levine certainly provide a “radical” four-part financial plan:

1. Quit today
2. Pay cash
3. Don’t retire
4. Die Broke

I carry this book around with me in my laptop bag. Whether it’s so I have it handy when I finally write this book review or I honestly want to live by it, I’m not really sure.

What makes a good personal finance book?

I like how it’s written. The voice is authoritative and the book is sprinkled with illustrative examples of real-life financial planning clients which made the lessons more tangible. It’s a really radical personal finance philosophy that might not be for everyone. Even I don’t follow everything it says but the points they make are really helpful.

I personally Quit Yesterday and work literally for myself. It’s great to have that affirmed because it’s sad how I see and hear a lot of zombies on the daily commute apparently living from paycheck to paycheck and with probably no aspiration of breaking free, working for themselves, of promotion or standing out in their job. If I have them read this, they probably won’t even begin to comprehend how they can apply it to their life. You’ll need to combine this book with a lot of personal development exercises to fully appreciate the Die Broke philosophy. And appreciate the sarcasm of PFHacks’ top 7 acts for dying broke.

Buy Your Second Home First

While my last book, Your Money and Your Man, says that you ought to buy a house the first chance you get just because you can, Pollan says you should buy your second home first. Foget about starter houses and serial home ownership and buy the house where you want to live until you have a family, until you grow old and grey.

I have nothing against buying your second home. I myself am undergoing a dilemma of renting or buying. I don’t know where I’ll be by end of this year, so I guess I should just stop about thinking of moving into a brand new place. Now where that second home will be I don’t know… Serendra at the Fort is fancy and really more of a status symbol. In The Millionaire Mind, the author surveyed self-made millionaires and they mostly had old houses with appreciating value and they don’t go for novelty. So if I want to emulate them, I probably should look at houses in San Lorenzo, Forbes Park, Dasmarinas, Greenhills — maybe BF Homes? Well, maybe if there were better water supply.

Pay Cash

Hide or destory your ATMs and keep only one emergency credit card. Visit the bank, wait in line, withdraw once a week the cash you need. So you feel the pain of spending. Credit cards and EPS truly desensitize consumers from the pain of spending.

I can’t realistically follow that though being an entrepreneur with erratic timings of cash flows. I keep my credit card handy for those dire times when there’s absolutely no cash because it’s all advanced for business or inflows are delayed. I monitor my card spending though and always pay in full. I know the pain of spending already.

Annuities and Living Rich

So, you ought to die broke, right? Leave your heirs with no assets upon your death, just enough life insurance to cover your basic funeral. How do you deal with crises? You’re supposed to LIVE RICH and enjoy your wealth with your loved ones while you’re alive and not want to build up this impossibly huge estate which will just be whittled away by estate tax.

One way you can benefit from your assets while you’re alive is through annuities, one way is a charitable remainder trust. I’m curious what’s the equivalent in the Philippines. You donate your assets to a trust fund or charity and they pay you an annuity or a yearly allowance as thanks for giving them the asset. This can be any titled asset like stocks or land. This way, you even get to be honored by the charity while you’re alive!

Get Disability and Health Insurance

Die Broke is yet another advocate of health insurance. Yes, I finally got my own real health insurance, not one of those not-as-useful health cards. My policy is designed the same way as a car insurance plan, I pay the annual premium which is still really low for my age and if I God-forbid have to be confined within the year or have to rush to the emergency room for whatever body pain, Blue Cross pays for the hospitalization expenses. If I get diagnosed with a sickness in the future, they won’t give me a hassle about whether the sickness existed before my policy. I did enough due diligence and apparently that’s a problem with the usual HMO. Contact me if you want to get my agent’s number; he’s very easy to talk to and helpful.

Die Broke Video

Stephen Pollan guested on Oprah. His exceptional videos are accessible via Quicktime and Windows Media Player.

Should you buy this book?

The 4-part financial plan is very radical and may be unsuitable for the taste of some. If you’re willing and able to put away your credit card (or don’t have one) and ATM, go ahead and invest in this treasure-filled book. Stephen Pollan and Mark Levine’s Die Broke plan gives you a priceless financial alphabet covering A (Accountants) to W (Wills).

Feedback for Die Broke:

I always wanted to learn a new language. Growing up in Manila, you can only get so fluent in English and Filipino. In college, I had a spreadsheet where I compared the amounts for learning German (Goethe Institut), French (Alliance Francaise), and Spanish (Instituto Cervantes). I must have had what they call paralysis by analysis because I only started last week — learning Mandarin.

I’ve had a free membership at ChinesePod.com since they officially launched in December 2007 but I just filtered their emails straight to label(folder) called (Old/Learn Chinese) so it was hidden right away. I decided to face it, that sometimes you have to spend for something to dedicate yourself to it, like how others pay for exorbitant gym fees or tutors. So I started with the Basic Plan, which is USD 39 for 6 months — exactly PHP 1753.10 (I called my credit card hotline the day after to know the exact peso amount for my monitoring). Less than P300 a month! Beat that! When I get a bit past Newbie, I’ll likely upgrade to the Guided plan.

It’s pretty neat actually. Now that I’ve paid for it, I actually listen to a new Newbie Mandarin lesson at least every other day. My roommates must find it weird when I practice saying aloud “zaoshang hao” (good morning) when I’m still too lazy to get up in the morning.

I download the audio to my iTunes — I have my own feed URL and access to lesson reviews and PDFs. I copy it to my pq1 USB disk (2GB, P540 from CD-R King) so that I can listen when I’m using the HP laptop. I also sync a copy to PalmOne Real Player for JP’s Palm Tungsten T3 which I’ve claimed for myself. And I have a printout of the first 6 Newbie lesson PDFs at my bedside.

It’s really suited for me since I like to do things at my own pace. Affordable quality Mandarin lessons — don’t you just love the magic of the web? I’ve listed other places you can get beginner Mandarin lessons in the real world, however I can’t attest to their teaching methods.

• Chinese Mandarin Business Language – Level 2: August 2-30 Saturday PM (Call PTTC at 4688969) ~ P2,500 for 5 Saturdays
• Speak/Read/Write Mandarin. 10 Days Guaranteed. Lessons available every Saturday 9am-11am, 3pm-5pm at 32 P. florentino St, Corner Araneta Avenue, Talayan Village, Quezon City. Call Dunric Ng at 412-5493 or 0922-881-1618. ~ Free

Next, I’ll be mastering the First Tone! Xing! But here’s one for you.

Good quality right there. If you sign up for a free membership at Chinesepod via the links on this post, I get a teeny-tiny thank you from them, so I’d appreciate that. And oh, I just remembered. I don’t have a Chinese name So I still can’t fully practice the “What is your name?” exercise. Know how I can get one?

Learn Chinese with ChinesePod.com
Here’s what ChinesePod’s customers are saying…

“It is the first time in years that I am truly learning.I am able to fit the learning into my schedule. Many thanks.”
“I simply love ChinesePod. Keep up the good work!”
“This is a great way to learn. I love the flexibility of the material presented. The podcasts are so listenable and the extra learning tools for the dialogues are extremely helpful.”
“Very high quality lessons — interesting, contemporary, relevant.”

Why not see for yourself.
Click here for a free trial.

Written by Beth Kobliner; Published by Simon & Schuster New York

The title just reached out to me, you know? Even if it was a bit more expensive than my usual books, I got it for the simple hope that maybe, just maybe this book would be just right for me. And, yes, Get a Financial Life has been pretty handy, along with Your Money and Your Man by Michelle Singletary.

What I love about this book

• There’s a Cheat Sheet! Chapter 1 Crib Notes breezes through the must-do’s which are thoroughly covered in the eight following chapters.
• Beth touches on all important personal finance topics, making it a handy reference in my other readings.
• Beth has in one place, Chapter 2 Taking Stock of Your Financial Life, three financial rules of thumb:
  1. The Debt Rule: Total debt (excluding mortgage) < 20% of your annual take-home pay
  2. The Housing Rule: Spend <= 30% of your monthly take-home pay on rent or mortgage payments
  3. The Savings Rule: Save >= 10% of your take-home pay each month.
• Beth writes in a straightforward instructive way that’s not condescending. She establishes rapport straight from her words and not just by sharing anecdotes.
  I look forward to her sporadic “I know of a couple who had to agree to water their landlord’s plants…” and similar anecdotes. I wish personal finance writers could compile their odd anecdotes in one place – that should be entertaining!

• I like how small grey boxes scattered throughout the book help to drive the point. Some tell a story (like the horror story of Kathy and Michael who charge a Hawaii honeymoon on their credit card), summarize important points (like pros and cons of online bank accounts), or list resources (like state housing agencies). Q&A sections also break the monotony of long texts.
• My favorite chapter? All!! Okay, okay, if I really had to choose… Chapter 5 All You Really Need to Know About Investing and Chapter 8 Insurance: What You Need and What You Don’t were easy to go through. Index funds are a good way to go. I’d disagree with her view that being single with no dependents means you don’t need life insurance though because you really always have dependents – whether it’s your aging parents or your brothers or sisters. Someone will always need your help. Still, she explains the typical options in health care, auto, life, and disability so easily – you’d wonder why you were ever scared of trying to understand them.

My rants — but not due to the author

This book was written with yuppies in mind, and it did feel oh-so-right… yet… Once again, I couldn’t relate with the US-specific advice, like the IRA or Fannie Mae, so I tend to just skip them. I need to convert the $ amounts to Philippine Pesos but that’s to be expected.

Overall, Get a Financial Life was a good read for me—and it’s one of my top 3 picks for books to carry with me just because I always have to have a book with me.

You can visit Beth Kobliner’s companion site for helpful calculators and book previews. .

Over the next weeks, I will be giving you a series on Building Wealth: A Beginner’s Guide to Securing Your Financial Future.

Among the topics we’ll cover are:

1. Introduction
2. Wealth Creation
3. Budget to Save
4. Save and Invest
5. Take Control of Debt
6. Protect your Wealth

The articles will be a Philippine adaptation of a primer with the same title released by the Federal Reserve Bank of Dallas.

This series serves as your Money 101. Print out the pdfs and do the activities as assigned!

Or you can get a copy of the whole series straight in your inbox. Just fill out the form below and you’ll receive your access links as soon as you confirm. You’ll be redirected here after you submit the form.

Dec 27, 2007. I’ve discontinued my mailing list account. I still have to find time to finish the Building Wealth series. Why don’t you subscribe to my RSS feed so that I can update you as soon as it’s up

Some of the features of PinoyMillionaire:

• Free membership and email updates
• Lessons in personal finance
• Listings of financial seminars
• Advice from personal finance experts and practitioners
• Listing and comparison of available financial products and services
• Resources and digital downloads
• Special updates on anything and everything about the Philippine
  economy and how it affects individual Pinoys

Why set up a new website? Why give up MarieCasas.com?

I’m so excited! Pinoy Millionaire provides a more appropriate venue to give you guys the information you need for your financial education. It’s kind of hard to give a comprehensive view and market the site when it’s tied to my person.

I’d like to redeem my domain for myself and build the financial literacy campaign at PinoyMillionaire.com and with International Marketing Group.

On my Someday list is build an NGO for financial literacy in the Philippines or build a money school or franchise from Money Camp or Young Biz UK. The costs are astronomical and they’re all offline.

IIn the Philippines, Colayco Foundation and IMG provide seminars. The government also conducts talks for OFWs. However, there is still a serious gap. PinoyMillionaire will allow me to do something about financial literacy now and apply internet marketing skills that help me promote and do better with Pigmata projects.

This would also allow me to mix in my learnings from different aspects of Pigmata Media and school.

If you want to go a step further, you can schedule a one-on-one session for financial planning.

Free personal finance web application

A free personal finance software called Mint is about to come out. It may give a more intuitive approach to managing money as it claims to find ways to save you money! It features automatic categorization of expenses.

Now, if only there was a way for these very interesting web applications to integrate with my Philippine bank accounts and online stock brokerage. I’m doing it manually right now — should I go ahead and make a Philippine version of Mvelopes and/or Mint? I thought of that before but I think the more pressing issue is to push for financial literacy first. People should know the basic financial principles before even thinking of trying new software or using credit cards.

Right now, I’m trying out You Need a Budget by Jesse Mecham.

Personal Finance 101 Newsletter for Yuppies

I’m also working on a newsletter tutorial for you working young beautiful people so you can get your personal finances on track and catch up on 20+ years lacking financial education. This should be up within this week. I’m giving a special treat with it too! I’ll put up the sign-up link on Tuesday so you can get in early.

Free Ebooks

Check out this free ebook on budgeting that I highly recommend you read.

• Money for Life teaches envelope budgeting in a laid-back fashion because it’s in storytelling format. I’m giving you a free 80-page excerpt. I printed this out and wish I could share more real-life examples but I honestly think the Filipino culture of “bahala na” is so dominant that people don’t even want to bother with understanding finances. I gave a quick preview here.

The Foundation for Credit Education says:

For individuals who don’t like to work with figures, the “envelope method” provides a simple way to build a savings fund. This convenient system allows you to set aside money each week for various expenses without making frequent trips to the bank or keeping paper and pencil records.

What do you need?

• Discipline and commitment. If that’s so intimidating, fine, discipline and commit yourself for 30 days (just like a trial period!).
• Past utilities and phone bills, credit card statements
• Envelopes
• Calculator/Spreadsheet, budgeting software

Does this even really work?
The envelope budgeting system has been around for a long time. Working on the principles of paying yourself first and spending money only according to your plan gives you a sense of control that you otherwise wouldn’t. It’s right there in the school of KISS.

Is Envelope Budgeting Effective?

Let’s do it manually before you even think of buying or using software so that you know the principles behind the system. This illustration uses 10 actual envelopes.

1. Get your past utilities and phone bills. You will be basing your budget on the amounts from your previous bills so that you’ll be setting realistic expectations.
2. List down the following on a piece of paper or in Excel:
• Monthly income (fixed or average)
• Fixed expenses
• Savings (Pay yourself first –10% of your income)
• Utilities
• Credit card repayment
• Loan/mortgage
• Gym membership
• Variable monthly expenses – use separate actual envelopes
• Meals
• Entertainment (eating out, movies)
• Big-ticket items (one-off)
• Summer vacation
• Furniture
• Down-payment for a house or car
3. ALLOCATE.
• Divide your paycheck by 1, 2, or 4 (depending how many times you get it). That’s MONEY GOING IN.
• Divide your total fixed monthly expenses as well (1,2,or 4). This is the amount you automatically set aside by auto-debit to a separate savings account you use for spending or withdraw this amount and keep it in an actual envelope. That’s part of MONEY GOING OUT (NOW).
• Divide your variable monthly expenses by 2 or 4, depending on whether you like to keep your spending envelopes by week or every 2 weeks. This is part of MONEY GOING OUT (NOW).
• Divide your big-ticket items by how much time you have left. This is part of MONEY GOING OUT (LATER). If you want to buy a TV 4 months from now, set aside a fixed amount every paycheck so that you’ll have enough when it’s time to buy. Just think how relaxed and in control you’ll feel when you walk into that electronics store knowing how much you can and will spend. It’s very gratifying.
• If your money runs out, say for grocery, it’s up to you if you can give up that extra fruit or if you see you still have money left in your Entertainment envelope, you’ll transfer funds from there to your Grocery envelope.
4. TRACK
• Always carry a pen so you can write down how much you spent for what outside your envelope. It’s definitely easier to write it down at the time you buy something than to accumulate receipts which can get so boring or intimidating you’ll just give up on it. So carry those envelopes with you in your planner or in your wallet and mark them with a pen every time you buy.
• When you use your credit card for, say, dinner under Entertainment, transfer the cash from the Entertainment envelope to the Credit card repayment envelope. Don’t spend money you haven’t earned.
• Every month or every 2 weeks, check out your spending envelopes. How much is left? How much did you transfer? If you have money left over, you can transfer it to your Savings envelope rather than “reward yourself”.
5. COMPARE
• As you can see in the illustration, we haven’t been able to set aside money yet for the vacation and furniture since the expenses based on actual still just zero out. In a few months, when expense are brought down by discipline and continuous cutting back, we should be able to set aside P500-1000 to contribute to the Vacation fund.
• Isn’t that what the Savings envelope is for? No. The savings is meant to build up an emergency fund good for 6 months. This is a good rule of thumb for when you get sick, or a family emergency arises, or you get sacked.

But wait!
What’s exciting too is that we planned for only 2 paychecks per month.

(2 paychecks / 1 mo.) x 12 mos. = 24 paychecks

Something’s fishy! Hm. Look again.

(52 wks / 1 yr )x (1 paycheck / 2 wks) = 26 paychecks/year

There are 2 paychecks that will come in that you won’t be spending out. We didn’t even include 13th month pay yet. So you’ll have extra money left over just by spending only what’s in your envelopes.

Resources

If you want to get more into envelope budgeting, you can read a free excerpt (I had fun reading this) of Money for Life: Budgeting Success and Financial Fitness in Just 12 Weeks, which retails at $9.95. It certainly opens your eyes about the practicality of the envelope budgeting system and how retiring comfortably and controlling debt is possible. It has a storybook approach rather than how-to-this how-to-that or motivational Robert Kiyosaki “I promise you riches” sort of book.

Here’s a video presentation that shows pretty well how Envelope budgeting works.

Here’s also a helpful 4-page budget discussion from Snowmint Creative (more technical and shorter reading than the “Money for Life” excerpt.)

Is there software I can use?
The following are based on the envelope budgeting system. For those based in the Philippines, right now I’d say your best bet would be Quicken. The Mvelopes team has yet to expand services and I’m still evaluating the other products.

Free/Open-source

• Budget Lite 2.7 (Mac OS) by Snowmint Creative Solutions LLC – No product support
• My Spending Plan – free and online

Paid Software

• Get Quicken by Intuit and then enhance with your envelope budgeting system.
  Quicken Basic 2007 is $29.99 ++ for add-ons –> Save 17% + Free Shipping
• Very popular is Mvelopes web application software by In2M Corporation. It’s based precisely on the envelope budgeting system and accesses your credit card and online banking accounts.
• Budget (Win/Mac) by Snowmint Creative Solutions LLC
  Free to try / $29.95 digital download
• You Need A Budget
  $39.95 + Bonuses (60-day money-back guarantee)
• The B Word (Win)
  $34.95 (90-day money-back guarantee)
• Make$.Cents 4.1 (Win)
  FREE to try for 30 days; $29.95

I hope you got a practical grasp of envelope budgeting. It’s as simple as your money in equals your money out to different saving/spending envelopes. No overspending.
If you want a more technical method, we’ll take a look at spreadsheet budgeting next.