Migs and Alaine

Chronicles of a Happy Married Life

Tag: financial

Is It Debt, Or Is It Equity?

During this time of the pandemic, we should be more careful about how we spend our hard-earned money. When we hear the word debt, we sometimes have this bad connotation about it. But this article perfectly explained historical debt and how good debt can actually help us in our education, careers, and businesses.

For the longest time, since we started our relationship, we always buy all of our stuff in cash. Saving up for something has always been our go to strategy and it works. We were so scared of debt. Credit cards are a no no, because we know a lot of people who were burried in debt because of bad debt. Because we both work in a Financial institution, horror stories of our clients even haunted us in our dreams. LOL! That is until we decided that we need a car.

When we purchased our very first car, we paid it off through a bank loan in a span of 18 months. We didn’t have enough money to buy it in cash. But we realized later on that the money we earned because of our car is even higher than the car’s value. Same thing happened with the new truck that we also loaned in 2019. It has helped us with our food and tech businesses. These are perfect examples of debts that generated income for us.

One of the most successful entrepreneurs from Migs’ family educated us about the pros of borrowing money for a business. He told us that we should not be afraid of debt, as long as we set our priorities straight and use it to make more money. That’s how he started his first business. Although we haven’t tried a business loan yet – we totally get his point. It just takes hard work and responsibility to pay off a debt in order not to be burdened by it.

How do we manage debt? We follow these rules at home.

  1. Prioritize bills. We do not let bills pile up because that would mean additional fees.
  2. Needs before wants. As long as there is food on our table, bills are paid, our clothes are clean – we couldn’t care less if we do not have the latest model of home appliances, gadgets, shoes or bags.
  3. We make wise purchases. We do not settle for cheap items that we won’t be able to use for a long time. We always prefer quality products.
  4. We take care of our health. Even if you have insurance to cover your hospital bills, the time that you lost is invaluable. It sounds cliche but health is wealth!
  5. Taking a vacation once in a while for our mental health. Being frugal doesn’t necessarily mean that you shouldn’t be exploring. You can always travel and stick to your allotted budget.
  6. We prepare our meals. Home-cooked meals are always healthier and yummier.
  7. We only withdraw a small amount of money. We always prefer online transactions to save time and to refrain from going out. Because going out could mean gas + food allowance.
  8. We do not compare our lives with other families. Life was never a competetion. Our goal is just to make ourselves better.

Debt can be considered as equity depending on our mindset and commitment. Debt has saved many people and businesses. What about you? What’s your take on loans/debt?

From employee to employer in 3 years

A lot of you already know that Miguel had been sick for a year.  Having a sick person at home can hurt you both emotionally and financially. We are very traditional when it comes to saving money. We save money thru our bank accounts. Though we have considered investing , we still haven’t decided yet the best investment for us. We tried real estate but I would say that  it’s not really an investment (unless you bought your house in cash) if “passive income” is what you are looking for. Especially when emergency arises.

I have had a good number of signature bags and shoes  that I had to sell online just so we can have enough funds while Migs was still recovering. It was the best choice to make instead of spending whatever money we have saved in the past. We both regret not listening to financial advisors who were very much willing to help us with our finances. We have made bad decisions and would like to be more secure of our future.

I have read so many financial books and all of them are very inspiring but took me hours/days to finish reading. When I received a copy of Don Soriano‘s Break free, I was excited to flip through the pages. The guaranteed 1 hour of reading triggered my curiosity. But it’s true! I read the book in 56 minutes. It’s just like spending a lunch break or your idle time learning.

What I love about the book is that it didn’t use jargon or words that might be difficult for someone who’s financially illiterate to understand. When I say illiterate, I don’t mean anything wrong with that – I just meant people who are clueless on where to put their hard-earned money, okay?

Majority of Filipinos can relate to Don Soriano’s story. He’s just like almost everyone of us. Normal person who earned a college degree (well except he is a CPA board top notcher) who entered the corporate world then shifted to putting up a business, buying things that he doesn’t need and ended up being broke.

I don’t want to tell you every single detail about him because I don’t want you to rely on this post alone and not read his book. LOL!

Grab a copy while you can. Find out how he managed to overcome his financial struggles. You may also reach out to him via his official Facebook Page.

I tell you, I have attended several seminars with different business owners, CEOs, etc and the seminars do not come cheap so, if you get the chance to learn a lot of things about finances just buy buying a book and spending just an hour to study it… You are saving lots of money! I am not saying that seminars are bad. I have built a network of career and business minded individuals from the seminars that I have attended, but if you are skeptical in spending money for a whole day of seminar – Don Soriano’s book may be a good start.

I can give this copy to one of our readers (that might just be you). Just let me know why you want to receive it by leaving a comment below. In case I won’t be able to pick you, you can read a chapter of this book for free, just click this link.

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