The Bible teaches you to be Rich

By: JuanCho D.

“Don’t build your house and establish a home until your fields are ready, and you are sure that you can earn a living” - Proverbs 24:27

Why there are lots of religious person still drowning in poverty. Reading bible alone will not get you rich. The above message you won’t understand if your financial consciousness is still asleep. How you can then understand the message? Financial Education, Let’s examine the message in financial world.

Housing Loan (Building house directly - Debt)

                The common strategy, owning a house of out someone’s money. There is nothing wrong with owning a house the question is did you own it smartly? Let’s say you loan a house for 3.6M for 10 years payment, that will give you 30,000 per month. Now let’s own a house the other way.

Farm / Fields (Building a farm first - Lending)

                “Those who borrow are slaves of moneylenders” –Proverbs 22:7

                We will do the opposite instead barrowing we lend our money to companies that need for their business expansion. Where we can find good company? Stockmarket is the place where giant companies, who does not want to borrow capital from the bank. They are asking public investor to be part of their business. Companies like San Miguel Corporation, SM, Jolibee and many more. In housing loan you are discipline monthly to pay an amount. In stockmarket it is called Cost Averaging a good and productive strategy to invest. Then your investment will compound in a given time (law of compounding interest). Next table will be the possible outcome of your investment.

3.6M House Bank Finance 10 Years vs 10% Interest on Investment
Years	Monthly	Yearly Payment	Compound Interest	per year interest
1	30,000.00	360,000.00	396,000.00	36,000.00
2	30,000.00	360,000.00	831,600.00	75,600.00
3	30,000.00	360,000.00	1,310,760.00	119,160.00
4	30,000.00	360,000.00	1,837,836.00	167,076.00
5	30,000.00	360,000.00	2,417,619.60	219,783.60
6	30,000.00	360,000.00	3,055,381.56	277,761.96
7	30,000.00	360,000.00	3,756,919.72	341,538.16
8	30,000.00	360,000.00	4,528,611.69	411,691.97
9	30,000.00	360,000.00	5,377,472.86	488,861.17
10	30,000.00	360,000.00	6,311,220.14	573,747.29
	Total	3,600,000.00		2,711,220.14
		2,711,220.14	Cost of Ignorance

Most of us Filipino’s choose to build a house directly base on the above table it’s not the wise choice. Worse the great Filipino dream “I will go abroad, work anywhere so I can build a big house for my Family, Parents and Siblings”. Great dream! But most of us forgot to build a farm (livelihood), a living. Don’t prepare for the great crisis the retirement period. If you have built your farm first you have a house as well. “If you buy thing you don’t need, later you will sell things you need” –Warren Buffet. The statement is so true that you don’t need to look anywhere for examples. Lots of people out there are force to sell their house in return of living.

Synopsis

                I am not telling you not to buy a house, buy a house in a smart way. If you really need it badly, settle for the minimal needs. Point is we all have two choices sacrifice now and enjoy later or enjoy now and sacrifice later. I rather sacrifice now while I’m young and strong than later while I am old, weak and helpless. The best investment we can have is in our mind. Educate ourselves learn how money works. Success leaves a trail, it is written in books, videos, training manual etc. All we have to do is read it, attend seminars and duplicate how successful people did it.

Stock market Myth

1.       Only rich people can afford to invest on it.

Yes it is true 20 – 30 years ago. Internet revolution makes it affordable cutting down the need of broker agent to come to each individual to close the deal. In fact the world was shock when Bo Sanchez a Preacher, entrepreneur and investor told in his “My Maid Invests in the Stock Market”. Imagine his house hold helper did so why you can’t?

2.       It is a dangerous investment.

Yes it is if you are greedy and don’t have enough knowledge. Lots of strategy how to invest on it and depends on your risk appetite.  A proven strategy such as Cost Averaging and Diversification lessens the risk to a tolerable level.

3.       Only expert in finance can do it.

Warren Buffet said “You don’t need to be a rocket scientist to start investing”. There are two ways to invest in stock market direct and indirect. If you choose direct investing of course you should have an advance level of understanding while indirect investing cut all that hassle of studying, reading and analyzing statistics. 

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