Your finances is like your belly

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I know this is a funny idea, but it keeps on ringing in my head that I can’t stop myself wanting to write it.

But first of all I want to say that I have no intention of discriminate or bully others about their physical feature. So as an example, I would be using myself so that I won’t be hurting anyone else opinion or self-worth.

This is just an analogy of a big belly and a fat purse

source: http://makeupandbeauty.com

The whole idea behind this idea comes from the book “The Richest Man in Babylon”. One of the seven cures in fattening your purse or to translate it in current wordings, one of the 7 steps to be financially rich is to save 10% every time we received income. This idea is practically the combined habit of saving and the principle of paying yourself first. Let me first give you a background why people in those times are concerned of fattening their purse(in our language “wallet”). To fatten one’s purse means to have lots of coins specially gold coins. A fattened purse creates that clacking sound of metals hitting each other. In our times we have the “Catching” sound which we equate to money or moolah. Hearing that sound is actually gratifying in those days. It makes one feel wealthy and capable. It’s an assurance also at times when one enters a store or restaurant and surely the owner or attendants will prioritize you over others. It si like a visible credit rating in those times.

Purse full of gold

source: http://trend-kid.com

Now why it is like your or my belly?

The first cure teaches one how to increase wealth by accumulation. So if one receives 10 coins every week and leaves one as well every week what will happen is in the second week you have two coins, and in the third 3 coins, and so forth.  To compare that to my belly if I keep on eating the same regular amount of food and normally excrete it as well then my belly would just be the same. But if I ate more than the usual and excrete normally there are excess left inside me that turns into fat which normally deposits first to my belly.

If I keep on doing this, what do you think would happen to my belly? Of course it would start to bulge making me a big boy again after losing it hard for so many months. It goes with the principle that what you truly have is what you keep. So if I eat and eat it is natural that I will accumulate fat and in the end have a big belly. Same thing with your finances. If you get your income and set aside something it is sure that it will accumulate and in no time you have  a huge savings and wonder how it all happen.

Same goes, if you don’t set aside a few or worst is even to borrow money for your wants. If you don’t eat at all and go on a diet you will become thinner and the worst of it is when you become anorexic and end up as thin like paper and stick already. Such situation is not good. That si as the story says “a lean purse”.

But let’s go back again to the title of this post to add a twist, your finances is like your belly. If I keep on eating and eating what happens? I will become obese and have a higher risk of having several diseases like diabetes and high blood pressure. Same goes, if one keeps of fattening your purse. It might not be able to contain it and it destroys the purse, thus losing your money and worst is you become a target of thieves, kidnappers, and all bad elements attracted to money. The lesson here is not to just keep money in your wallet but spread it to earn more money. You got to invest it so that it gives you back money. This is like exercising and proper diet. Exercising is like putting it to investment that will earn  income and diet is like budgeting so that only the needs get funded and wants are allowed later on.

When one exercises and have a good/balance diet one becomes healthy. Even more rewarding is having a well toned body and a body that can easily fight diseases. Such state is what we call financial freedom. One does not need to accumulate so much to be financially free, but rather one must be able to well manage their finances in a way that all needs are met without worrying for the next need and have enough for emergencies and uncertainties. Such could be achieved if one’s savings are invested in financial vehicles that will give return to the present and the future needs.


Remember this first cure of achieving financial freedom that is to save a part of your income that gets to be invested thus returning more money to support your needs right now and in the future. If you can’t remember this lesson look at your belly. If you eat a lot it is normal that it becomes bigger, and if you don’t eat at all it becomes so empty that you can feel your intestine grumbling.

Financial Freedom Advocate About the blogger

Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Check him out in Google+ Learn more about Louis and his financial freedom advocacy here.

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3 comments for “Your finances is like your belly

  1. Melzen
    March 18, 2015 at 11:31 am

    Hi! I’ve been reading your blogs for about a month now. I am grareful for all the insights you shared. I am interested in learning how to invest esp in the Philippines and your site helps a lot. Thank you.

  2. Timothy Alcantara
    March 24, 2015 at 10:40 pm

    Hi SIr! This is Tim (remember me) im the 21 fresh-ish college grad. Who plans to invest in stock market. I read your reply to me! Thank you much for your insights! Currently, im planning to buy UITF from Security Bank under SB PESO EQUITY. Basically, i have questions pa po if you dont mind.

    1) I watched about the COL’S Technical Analysis Training in youtube. They really made it easy for beginners. As usual i was intrigued by it. Since it was really valuable when it comes to investing. Now, Can we use the Technical Analysis in UITF? Since its a differese investment? If so, can we really measured it? DISCLOSURE: I know that UITF takes time usually 2-3 year. But i just want to maximize my purchasing power when to buy.

    2) Any recommendation for UITF? which banks? I decided to pick Security Bank kasi last year they did great! 38% ROI.

    P.S: Im thinking to start at UITF for me to have an experience para atleast my beforehand knowledge ako before i enter the stock market this June

    Thank you so much!

    Hope you read this.

    Again,

    Tim

    • March 25, 2015 at 11:32 pm

      Hi Tim,

      Wow very good at nagstart ka na maginvest.

      UITF hmmmmm mukhang mahirap gamitan ng Technical analysis. Mahirap in a sense that like you said it is made up of several stocks. I guess what you can do is to monitor the unit’s price movement. Problem is you have to graph this yourself not sure oif banks provide this info readily to do your tech analysis.

      To tell you the truth I don’t hold UITF 🙂 I invest directly in stocks through stock brokers. UITF are like mutual fund only that it is managed by a bank.

      It is not bad investing in UITF, it is a good start. But I know you have to closely monitor it with your bank. They have terms and if you decide to redeem it may mga ibat ibang deductions. Make sure you understood the bank’s terms and conditions. Talk to the banks fund manager or those directly handling the UITF so that it will be well explain to you.

      Hope this helps!

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