“Money, Money, Money”

“I work all night, I work all day, to pay the bills I have to pay / Ain’t it sad / And still there never seems to be a single penny left for me / That’s too bad”  

I believe most of us could relate to those lyrics from ABBA’s worldwide 1976 hit, “Money, Money, Money.” However, the solution is not as simple as the way the song revealed.

“In my dreams I have a plan / If I got me a wealthy man / I wouldn’t have to work at all / I’d fool around and have a ball / Money, money, money / Must be funny / In the rich man’s world”

In his no-holds barred book, “No Nonsense Personal Finance: A Step By Step Guide,”* personal finance coach Randell Tiongson declared, “There are no shortcuts to wealth.” 

He wrote, “Many times we often look for quick answers to our complex problems which are just wishful thinking. There are no shortcuts in achieving financial security, even if there are many proponents out there claiming so. We need to go through a process and go through a path which can be difficult and challenging.” (p. 8)

Tiongson shared some very revealing statistics about the way we Filipinos handle (or mishandle?) our money. Citing a 2011 report by the Central Bank, he wrote

[T]here are about 36 million Filipinos who own a bank account. … 23 million of the 36 million bank accounts, or roughly 2/3 have balances below P5,000.00! ...  Another study I saw claims that only 1 out of 10 Pinoys actually prepare for retirement. (pp. 3, 4)

Thus, we end up with what he calls the “sandwich generation.” 

As the children provide for their parents, they also provide for their own children at the same time. … This sandwich generation will not have enough set aside for their golden years, and they themselves will be taken [cared] of by their grown children thereby participating in an endless and vicious cycle we now call as Filipino Financial Planning. (p. 6. Emphasis added.)

Yes, we are to take care of the elderly. Paul wrote these words in the context of caring for widows (the most vulnerable financially in their society at that time other than orphans): “But if anyone does not provide for his relatives, and especially for members of his household, he has denied the faith and is worse than an unbeliever.” (1 Timothy 5:8, ESV) But he also wrote, “For children are not obligated to save up for their parents, but parents for their children.” (2 Corinthians 11:14b) And one way of saving up for our children is preparing for our retirement and making sure we will not be a burden but a blessing to them.

Randell Tiongson. Image source: http://www.marvingermo.com/

Imagine a wooden bucket or barrel.** The water represents our financial security. The planks (or staves) are our financial habits. The metal band holding the planks together is our financial mindset. 

Adapted from NCD illustration.

Without the metal band, we will not have a bucket at all. Without the right financial mindset, we would not have a consistent financial habit. Tiongson pointed out, “We will need to challenge many of our long-held beliefs, and we may have to alter our behavior.” (p. 8) As leadership guru Francis Kong wisely said, “If you can’t be an entrepreneur, have an entrepreneurial mindset.” (p. 25) 

He then recommended a five step process: 1) Improve cash flow, 2) Get out of debt, 3) Set up your emergency fund, 4) Get protected from life’s risks and 5) Invest for your future. (To know more about these steps, I encourage you to attend Tiongson’s “No Nonsense Personal Finance” seminar this Saturday, September 14, 2013. Click here for more info.) 

Image source: http://www.sarahharkness.co.uk/

I see each step as a plank in the bucket. The shortest stave determines the amount of water of water it could hold. So also one of these steps could be preventing us from achieving financial security. It could also be the key towards that end. For example, no matter how much we increase our cash flow, if we were neck-deep in debt, it would eat up whatever we earn. We need to make sure each plank is in place to be financially secured.

In the end, Tiongson reminds us that, ultimately, “every financial decision (and all other decisions) [we] make is… a spiritual decision.” (p. 161) Our goal is not to “fool around and have a ball… In the rich man’s world.” 

I believe that the true purpose of wealth goes beyond the comforts of life or a good future for our children. I strongly believe that we should become financially-abled because we need to be a channel of blessing for God to use to advance His kingdom. (p. 161)

We need to see that we are really managers of God’s resources and not owners.

My take? Let us take this no nonsense approach to our personal finance.

* I won my signed copy of this book through the Twitter contest held during Tiongson’s “iCon 2013: The No Nonsense Investments Conference” last June 22, 2013.

** I first heard this illustration from the Natural Church Development seminar.