Wise Words on Wealth (Part 4)

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Simply put, cash flow is money going in and out. Though it sounds easier said than done, the key to have a stable cash flow is to increase the money going in and, at the same time, to decrease the money going out. How do we do it? The last two points in our “Wise Words on Wealth” series explain how.

[Today, we will finish our F-I-N-A-N-C-E-S acronym. We already saw that “F” stands for ‘First Give To God,” “I” “Invest In Yourself,” “N” “Never Live A Life Of Debt,” “A” “Avoid get Rich Quick Schemes,” “N” “Needs, Not Wants,” and “C” “Control Your Spending.”]

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“E” stands for “Exert Effort To Earn More.”

Proverbs 10:4 tells us, “Lazy people are soon poor; hard workers get rich.” [1] Laziness like crime does not pay. It can make people poor. But hard work pays. It can make people rich. According to The Voice version, “A slack hand produces nothing but poverty, but an industrious hand soon takes hold of riches.” 

“It must not be tolerated. We command them to get to work immediately—no excuses, no arguments—and earn their own keep.” (2 Thessalonians 3:12, The Message) Image credit

Laziness is sin. “Don’t you remember the rule we had when we lived with you? ‘If you don’t work, you don’t eat.’ … [Laziness] must not be tolerated. We command them to get to work immediately—no excuses, no arguments—and earn their own keep.” (2 Thessalonians 3:10, 12, The Message) This is also the reason why we think we should not gamble. Gambling “erodes a biblical work ethic (by demeaning and displacing hard work as the proper means for one’s livelihood).” [2]

Robert Kiyosaki’s “Cash Flow Quadrant.” Image credit

My friend, wealth and life coach Chinkee Tan, introduced me to Robert Kiyosaki’s “Cash Flow Quadrant.” Here’s how Kiyosaki himself explained it:

Chinkee Tan explained that it’s actually possible to have the entire quadrant, that is, a person can be employed, self-employed, businessman and investor all at the same time. For example, an accountant works for a bank (Employed). During his spare time or after office hours, he accepts accounting projects from small companies who can’t afford a full-time accountant (Self-Employed). When he gets more projects than he could handle, he hires other accountants to share the load with him (Business). Then, he invests on real estate or in the stock market (Investment). 

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It is said that it’s only in the dictionary that success comes before work. There’s no shortcut to success. The only way to succeed is to work. Of course, we are to work smart as well as work hard. But working smart does not mean not working hard. It’s just that we focus our time and effort on what matters rather than wasting it on what doesn’t. Still, we have to work hard as we work smart.

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Lastly, “S” stands for “Seek To Invest Before Spending.”

It’s the Filipino dream to own his own house. That’s why one of the first things an overseas Filipino worker (OFW) would buy is a house and lot. It’s good. There’s nothing wrong with it.

Overseas Filipino workers arriving at the Ninoy Aquino International Airport. Image credit

However, though he could claim that it’s an investment, merely buying a property does not make it one. It’s an investment if he earns from it. So, if he puts it up for rent, it’s an investment. It could be an asset, of course. But its maintenance and real estate taxes could turn it into a liability. If an OFW buys a house BEFORE starting a business, he would have to work longer abroad as he pays for it or, heaven forbid, when he’s out of work he could end up selling it when his savings got used up.

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That’s why I think God has the OFWs in mind when He said, “Do your planning and prepare your fields before building your house.” (Proverbs 24:27) 

In short, before buying a house, one must establish a business first. I remember talking to a businessman-friend who just bought a new car. I told him, “I bet you bought it in cash.” He said, “No, it’s on installment basis.” Then he added, If you are wise, you won’t buy in cash. That way you could invest and earn more from your money.” 

So seek to invest before you spend. 

[1] All Bible verses are from the New Living Translation, unless otherwise noted. Emphasis added. 

[2] “Five Reasons Gambling Is Wrong,” Grace To You, 2014, http://www.gty.org/resources/articles/A157/five-reasons-gambling-is-wrong?term=gambling (accessed April 30, 2014).