Archive for the ‘Financial’ Category

How To Effectively Save For Your Retirement

Tuesday, March 22nd, 2016

When it comes to retirement seafarers always think the other way around. They always say what they want to do (as a retirement job) after retiring from the work at sea. But if you look at the dictionary the meaning of retirement is the opposite.”Retirement is the act of ending your working professional career – Merriam-Webster”, so now which is true about retirement.

When is the right time for retirement? Does age really is the measuring point when to retire?

Retirement should be done with careful planning and consideration. Remember that if you fail to plan, you are planning to fail. The worst of all is that if you have no clue what you should plan about for your retirement.


1. Set a clear goal.

What are your plans when you retire? What do you dream to do during your retirement? These are the starting point for your planning. Write down what you want to do when you retire and quantify it. Know how much you need to sustain those needs, 15 to 20 years more if you are to retire at an old age.

2. Make a good accounting of your current finances.

Look at your expenses; compare it with your income. Can your goal be achieved based on your current financial lifestyle and earnings?

If no, you have to consider removing the unnecessary expenses or increase your salary. That way, you will be able to work your way through your end goal.

It is not the money that you have in your savings, that is hindering you to retire early, most of the time it is the money that you spent that is hindering you.

You see, if you write it in a spreadsheet, you’ll be surprised that you have spent more than what you have earned. You just didn’t notice it because it is either hidden through credit cards, loans, and other means of debts.

3. Consider reducing your lifestyle.

Make a lifestyle check (it also includes your spending habit), can you sustain your current lifestyle when you retire? If you stop living the lifestyle that you have now, will you be still happy when you retire with a much simpler life.

If your answer is no, then you have a serious problem. You will have to pay a bigger tax for your house, tax for your car, hobbies that you cannot get rid of, and restaurants you need to visit twice a week.

It is better to start living simpler now so you’ll get used to it earlier rather than get rid of it when you already retire.

4. Start estate planning immediately.

People raise their eyebrows when they hear about estate planning, but it is the most essential action in your life that you need to address immediately. Everything that you have acquired from now until the future is subject to tax.

Your family will not be able to own them immediately if they cannot pay the appropriate tax. Literally, the government owns you. Even the lot that they will bury you, must be bought and tax must be paid (it also includes the coffin). It is inevitable and if you don’t realize it early, your family will have problem in the end.

5. You must know where to invest.

I suggest you find a financial planner that you can talk to, when it comes to making decisions in investing and planning. But the basic idea is, diversify your investment.

Invest in liquid assets (mutual funds, bonds, money market, etc.), and in solid assets (apartments, real estate, business, etc.). This lessens the risk of your money being in one basket. But remember, estate planning is always related to investing.

So whenever you invest on these financial services, make sure you keep it in line with your estate plan.

6. Spend money wisely.

Your current spending habit affects your saving habit.

  • If you spend more than you earn,
  • if you spend more than you save,
  • and if you spend everything you have without considering your emergency expenses, the chance of bankruptcy is upon you.

If you realize it earlier and change, then you have a chance of saving for retirement. But if you realize it at your late 50’s, sad to say you have a serious problem during your retirement.

Just to remind you, a person who retires at old age has plenty of health related problems that needs medical attention and maintenance, which requires money to maintain a good health.

7. Determine what age you want to retire.

If you can force yourself to save more rather than spend more, I think the best way is to motivate yourself to retire at a young age. This forces you to think that you are time constrained and you need to save a lot now so that you will benefit later.

Eventually it is about you, being a good steward of your finances.

If you understand that your work will kill you slowly, you’ll probably decide to retire early to live longer.

If you know where to begin planning then you can accomplish a lot of your financial planning for your retirement.

You must have a clear age when you should retire. Time is your friend if you understand that preparing for retirement, you need to start planning now.

But, time can be your enemy if you realize late in your age that you need to save for your retirement.

Have your take on this article and share it in the comment below. Let us talk about it and let others share in the conversation.


Tuesday, April 1st, 2014

Money is one of the reason we are working, we need our salary to sustain our needs. It sounds sarcastic but it is true.

I remember asking in the seminar that I usually conduct; who among them love their job, to my surprise, all of them raised their hands.

When I ask them again; who wants to work the same job 8 hours a day without pay, nobody raised their hands.

Then I ask them the third time who loves their job, nobody raised their hands anymore.

It simply shows that you are working because you have a salary.

It is not the physical money that brings us happiness. It is what it can buy and how you will use it. How you convert money in order to make you happy is what matters.

You can convert money into:

  1. Tech Stuff (e.g. Appliances, computers, etc.)
  2. Car
  3. House
  4. Food
  5. Utilities (e.g. Electricity, water, etc.)

In short, this is where your money goes.

But beyond that, there are other payments that you need to know.

Your money is further deducted into other categories or necessities:

  1. House and Lot Taxes
  2. Medical expenses
  3. Income tax
  4. Education, training, and related seminars
  5. Maintenance (e.g. Car, house, etc.)
  6. And a lot more…

All of this comes full circle to a single word that we are all familiar with.


You can only predict on how much you have spent but you cannot control it once you get the habit of doing it.


Your worst enemy is YOU when it comes to buying

Knowing is winning half the battle.

You must know when to spend your money and how you should spend it.

You only have 40 years to save until to retire. But the problem is, you are spending more than you are earning.

Look at the stuff you have in your house or your room.

If 80% of it belongs to the NEEDS requirement, and 20% are for the WANTS, you can safely say that you’ve spent your money wisely.

But if it is the other way around; you have a spending habit that needs to be corrected.

You must know your WANTS and NEEDS

Cost of living also affects the price of our commodities.

The money that you save in the bank now may not be enough to sustain your monthly expenses when you retire due to high cost of living and inflation rate.

If you don’t have a list of where your money goes, you will end up losing a lot of it without knowledge of why you lost it.


Information makes you aware but not make you rich overnight

Citibank publishes their survey regarding savings and spending habits of countries. Surprisingly the Filipinos are improving.

Awareness on financial management or financial literacy has a big role in making it happen.

Financial management includes:

  1. Planning personal finances
  2. Ownership of several financial products such as investments and INSURANCE.

These are a common problem to everybody that is why they always end up in having a large amount of debt.

EMERGENCY FUND are also necessary in every person’s list of must have. You can only last 3 months without a job.

The sad truth is all seafarers are working on a contractual basis. After the contract, they go home for their vacation without salary and waiting for the next schedule.

If for some reason you were not able go onboard the vessel (e.g. Health problem, not hirable anymore) your financial status and family’s future is on the line and after 6 months, you’ll have a large amount of debt and big loans to pay.

Although, other employee has a monthly income, few of them understand the importance of having an emergency fund.

On the other hand, seafarers are eager to jump into business, investing their savings into a gamble that they never understood.


Seafarers are taught to navigate, repair the ship, manage the crew and ship, but not to manage his own business.

You may get overwhelmed on the preparation, system, money that you will invest, but in the end you just don’t earn back the money you spent.

You MISS OUT the factors you need to know for your business to prosper and that is YOU.

If you are not there physically at the developing stage of your business, you have already put your money or savings at risk.

Unless you have an idea about the business you wanted to venture, think twice.

Business is all about Raw Material/Product, Man Power, and Marketing.

Spend time to do this tips before it is too late.

How will you correct your spending habit?

Here are tips you can use:

  • List down your expenses for the past 3 to 6 months. Categorize your expenses and list down the sum of the amount you have spent per category.
  • If you have put a price on your expenses, separate your list between the NEEDS and WANTS column.
  • Collect all your credit cards put them on a drawer and lock it.

If you don’t know how to use your credit cards, it is better that you keep them locked and use them only if necessary. If you always bring them with you. Chances are it will be used. It is better to pay in cash all the time

  • Write this two questions on a piece of paper and post it on your refrigerator:

“Do I Need This?” – “What is My Next Action”

Whenever you are in your BUYING MODE, ask yourself that question. Then, you will understand why you need to buy only the things that you need what you need.

  • Apply the 80/20 rule to your salary.

80% of your salary is the amount that you’ll be spending, and 20% of it you will save as emergency fund. On that 80% you will pay your bills and buy other stuffs that you need. It will be your monthly budget for expenses.

If you respect yourself, you will decide to save for your future. Your savings is for your future and for your family.



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Fixing your financial life is just not good enough

Monday, February 3rd, 2014

Prevention is better than cure. In my opinion if you apply the same principle in your financial planning, prevention is better than fixing. It sounds odd but it works better for me.

Preventing yourself to be in a lot of debt is better than fixing your debt payments while you are in it.

Preventing yourself from being broke is a lot better than finding a way out when you are already broke.

Preventing yourself from having debt by starting an emergency fund.

Preventing yourself from buying unnecessary stuff that only clutters your life and never really gives you satisfaction.

The list goes on but the bottom line is that prevention is always the better choice.

It makes sense right? That is the reason why I’ve written this series of blog post to open your eyes and talk to you that your decision to save for your future is the key to a successful future.


Tell me what I need to know.


The first thing you have to organize is your lifestyle. This is something of a personal choice. But you can try to ask yourself and answer this question on your own:

1. Do you see yourself living the same lifestyle 10 to 20 yrs from now?

2. Is your current monthly expenses enough for you, or you want to increase it to a better or doable amount?

3. Do you think you have the money to keep up to your current monthly expenses until 10 to 20 years from now or until you retire?

4. Do you have other source of income?

5. Do you think your current savings is enough to cover 6 months of your expenses in case of emergency.

These are just simple questions that you can ask yourself and find out on your own at what stage of financial stability you are right now. If you cant answer the question then you have not planned your future well.

The ISM gave us a mantra that we highlight during our safety meeting. “Plan what we do, and do what we plan”. Benjamin Franklin also quoted “If you fail to plan, you are planning to fail”.

Remember to plan it wisely and stick to the plan. Know your option, and know what you have.


Today is a good day to save, not later.


I have the habit of buying stuff that I never really need. Until one day I realized that my cabinet is full of stuff that I don’t usually use. I realized that I buy stuff because I just want them.

I started to simplify my life by getting rid or even selling the stuff that I don’t use. Before I buy any stuff I ask myself if I need it or if I want it.

The I realized that I have rid myself of the dilemma of buying out of want, but buying out of need.

A minimalist lifestyle teaches you to enjoy the things that you have and reminds us of how good life is if we just look for simplicity. Photography thought me the idea of “Less is More”, and I never thought that I would apply it to my lifestyle, job, and work flow.

The important value I learned from attending seminar and educating myself on financial planning through mentoring is SAVING. No matter what they say about interest and all those fund manager jargon, if you save for your future nothing could go wrong.

Time is something that when you loose, you cannot get it back again. And if you know your math and understand the idea behind compound interest , I am sure that you will consider to set aside money for savings.


Seafarer’s Basic Way of Life


As seafarers we have the tendency to buy out of our wants. Although it is illogical to others, it make sense to  us.

We stayed onboard for a long time, deprived of buying or spending money. We know that after our contract we have enough money for our vacation. So it is natural that the first instance that we have money is to buy. After all, we deserve to spend the money we’ve earned.

We must satisfy our needs, so instead of stopping you from overspending, I would suggest to inform you to spend your money wisely.

Think “Basic”! Buy stuff that satisfies your needs, with the basic features that you need, and would make you happy.

Don’t look at what others have that looks new and fancy. Ask yourself what you need and satisfy those needs. Buy stuff with a great deal for the price, but does not slow you down on features.

Think of long term. Try to buy stuff that you think would last for 3 years before you replace it. It will save you a lot of money, and frustration if you buy good quality stuff on a low price.

Talk with your wife. Discuss with her your financial status and what are your plans to solve it. It takes both of you to understand your current financial situation.

Remember that the your money is managed by your wife, and you are not always there to monitor it. That is why you should include her in every financial decisions that you will make.

You are the one who can figure it out. Every family has different situations that they are encountering. You must remember that thinking of only the Basic Things in life will save you in a lot of bad situations that you may later on encounter.

Let as start a conversation by commenting below. I want to hear your side on this story…

Be warned! If you do this again, you’ll end up broke.

Monday, January 6th, 2014

Being broke is the worst situation that you’ll end up in if you manage your money the wrong way.

Jumping into decisions without consultation often leads to disaster and poor knowledge of what your putting yourself into. It is like eating food in a dark room with no light. You keep on swallowing the food, but you do not know if it is still food that you are eating.

I grew up in a family of seafarers and that is the reason why I became a seafarer as well. My father’s friends often visits our house and talk about their family and what they have accomplished.

You will often hear the word “Business, Investment, and Savings” in their discussion. These are the common terms that seafarers has in mind, but very few have them.

5 years ago, the franchising business was a big boom in the Philippines. Food carts and other small start-up business are everywhere. Seafarers become targets of marketing agents due to their high income capacity. They started their micro-business venture and end up being a slave to their business.

Their time is consumed by their business and they think that their living their dream. After 3 years, the food cart market is already saturated. Too many product of the same type of food is being offered. Lowering the prices was the option to sell. Income become less than before.

Another big hype is the idea of investing property on land. Buying land is never an investment. Yes, it gains value not because you turned it to something different, but because of inflation. The inflation rate on the year that you bought is higher now that you are selling it.

Aside from that, you loose money yearly due to payment of tax. You can only earn from the land if someone will rent it from you, turn it to something profitable, or lie to someone to sell it to a hefty price.

Savings is more viable than the two. It is less risky and you can manage it remotely.

Let’s face it, our work limits our capability to handle our business remotely due to the fact that we are always on the ship, on different location, limited communication, and a few people to trust our business with.

I’ve seen countless times where seafarers are being rob by their own family and relatives of money that are supposed to be for their business. They end up starting the business, seen it break even, and end up broke and closed the business.


Being broke has a good effect


The experience of starting a business and seeing it prosper is good, but seeing it’s dropping down is not good.

It is ok to risk your money in business before you reach the age of 30 and with less responsibility. But if you are already in your 30’s and married with kids, you have to consider a lot of factors before risking your money to uncertain investments.

I’m not saying that you shy away to opportunities to invest, but rather make a research and learn more of the business that you are planning to invest.

If you have experienced being broke before, learn from it. You may have noticed how it feels like to see your savings account balance having a few peso left and deducted by tax.

You may have also ask for cash advance from your agency and used up your money paying bills and loans. It is a terrible experience a seafarer can feel, but you will learn a lot from it.

You will start to realize that if you have a financial plan before, you could have a better savings and less problem on your loans and business venture.


Don’t do the same mistake that others did.


I always emphasize that you start having your emergency fund. It is a better system of keeping yourself out of debt.

Some people will say that they are already old to have one, but I always told them that debt and being broke doesn’t choose what age you are right now, so why limit yourself from having and keeping an emergency fund.

List down all of the items that you are paying (bills, mortgages, etc.) and make an annual projection so you will know your annual expenses. Compare it with your annual income and you will have an overview on how much you are paying annually and if your earning more than what your are paying.

Make a list of your “Asset and Liabilities”. Asset is anything that brings money to your pocket and Liabilities is anything that gets money out of your pocket. Be realistic writing your list and don’t hold back if you think that it belong to the Liability list.

Make a total of your Asset and compare it to the total of your Liability list. If your Liability list is more than your Asset list, you have to do something about it to avoid ending up being broke.

As I have said a while ago, take your time in making decisions when it comes to financial matters. Remember that it is your hard earned money you are spending, so spend it wisely.


What must you do to protect yourself


Maturity and age opened my eyes to the truth that we all have a choice whether we want to be broke or not. In the past years I have experienced different storms in my life where my faith and financial status was put to test.

I was lucky to meet someone who opened my eyes and thought me financial planning in the early stage of my career.

Remember not to rely on one source of income. Multiple source of income is not bad, as long as you know where you are investing it and how you are earning money, by means of interest.

You must change your attitude towards spending and buying stuff. If you have the extra money then its fine. But as long as you are in a tight budget, it is better to stick to the plan. “Pay your Debts and build your Emergency Fund.”

Do not spend more than what you earn. It is an old idea that I have heard from my grandparents that my parents also told me. But sometimes we tend to forget it because we thought that we are earning a lot now.

But it is better that the bigger your salary becomes, the bigger your chance to save money. We tend to change our lifestyle immediately after earning an increase of salary and because of that, our liabilities increase and later becomes a difficult problem to solve.

Always know what you have (savings) and your limit to spend. Keep away from credit cards and unnecessary loans. Keep a monthly budget to spend and stick with it.

I hope that I have shared enough information that you can consider and opened your eyes to possibilities.

Share your experience and your thoughts in the comments below and let us start a conversation.

You will always be in financial trouble if you don’t decide to have an Emergency Fund.

Monday, December 2nd, 2013

All seafarers are money spenders. We come on-board and stay their for 2 months or more, and when we sign off we have enough money to spend.

But the question is how do we spend our money?

Some of us has enough financial literacy and knows how to properly invest their money. Most of us doesn’t have any idea at all and spend it to whatever comes in their mind first.

When I was a kid, my grandmother use to show me the “Envelope System” of managing money. In this process you simply count how many priority bills you will pay for the next 3 to 6 months.

If you have 10 priority bills, then you have to make 10 envelopes and name it accordingly. Then you start separating your money to those envelopes and hide them for safe keeping until you need to pay that particular bill.

It works for a lot of reason:

  • You force yourself to save to pay for that particular bill
  • It separates your daily money to your saved money that you will use
  • You distribute your money correctly and not missing out payable.

But the most important RULE that my grandmother told me is that you save 20% of whatever is left, after deducting your payment for the bills. this is the money you will use in case of emergency.

I never thought it that she was already educating me about emergency fund. I later realized about it after attending seminars on financial planning.


What you need to know about an Emergency Fund


Emergency fund is the money you set aside for emergency expenses. It sounds simple but very few people apply it to their financial planning.

We tend to go the other way when it comes to managing our money, especially debt. People usually want to borrow money rather that have an emergency fund.

Borrowing money is not bad, it becomes bad when you can no longer manage your debt which may result to bankruptcy.

But if you have an emergency fund or enough savings, you can still survive during your financial turmoil. Remember that emergencies can put you in debt or even worse.

Remember that a seafarers job is not a secure job. It is a hazardous job and we tend to forget the fact that an early stage we need to back up ourselves with an emergency fund.

Emergency fund can provide you with a number of ways to be happy:

  • If your job security is in question and you have set aside 6 mos of your salary as an emergency fund, you will not be worried to stay for 3 to 5 mos which is enough to find a new job.
  • Your wife is about to have a baby and you didn’t expect it to be that early, but you need not worry because you have money for this kind of emergency.
  • Your car got broke and you try to fix it but when you estimate your expenses, it was higher than your usual budget. Good thing you have an emergency fund to back it up and you are able to solve your problem without using your credit card.
  • It was the worst season of the year and your place was hit by a severe typhoon or disaster. Having an emergency fund will help you start again and repair whatever that needs to be fixed.
  • You have a very sick person in the family that you really love and take care of and suddenly they need to be admitted in the hospital for treatment. Having an emergency fund can cover your expenses and not lead to unwanted debts.

You see, their are no bad side on emergency fund as long as you handle it properly. You must know how to make it grow and not use it to buy stuff that is not a necessity


Learn to build the foundation of your empire


There is a wrong idea that some people consider Credit Cards  as an emergency fund. It is A BIG MISTAKE.

Emergency funds are supposed to keep you out of debt, not put you in debt and pay interest. Emergency fund are cash reserves that will help you solve your financial problem.

Remember to handle your emergency fund properly. Smart people keep it safe in the bank and set aside a certain percentage of their monthly salary to grow their fund.

Wise people set aside the same percentage of their monthly salary as the smart people. The only difference is that they save they emergency fund in high yielding accounts and earn good amount of interest. They also let their emergency fund earn money for them.

Just remember to be extra careful where to put your emergency fund. It must be:

  • Accessible to you or one more designated person in case of emergency.
  • Earn a decent amount of interest and in a safe savings account
  • Must total to at least 3 to 6 mos of your monthly salary.


Your neighbor knows how to grow their wealth


When building your emergency fund you must remember the word DISCIPLINE and CONSISTENCY.

Building an emergency fund is like a snowball effect. You start from a small amount until to increase it as much as possible and as soon as possible.

You can start by saving 5,000php a month. Open a savings account that is a passbook only account. That way you will not have an easy access to your account. It forces you to be lazy to line up in the bank just to withdraw money.

If you are not disciplined in handling your savings, I suggest that you open a savings account across town. A little farther than your town. So you will have a good chance of not withdrawing cash from your emergency fund all the time.

The key is to deposit money to your savings account a monthly amount of 5,000php and increase the amount by up to 50% every 3 mos.

That is why you need to have Discipline, by not withdrawing money from your savings account and treat it as an Emergency Fund; and Consistency in depositing the same amount of money and even more in order to grow your savings.

Giant leaps comes from small steps. You need to start as early as you can and continue it until you retire. When saving money becomes a habit, it becomes second nature and you start to consider saving money first before buying stuff.

The amount I put here may not apply to other people’s salary. If you want to know how much you want to save, you can take 20% out of the money you have after paying your monthly household bills. Consider that 20% as your monthly savings for your emergency fund.

When it comes to your financial security, everything matters. All the decision and actions that you make today will make a big difference in your life in the future. Learn to start now and reap the benefits soon.