3 Simple Steps To Achieve Financial Intelligence | The Investing Engineer

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3 Simple Steps To Achieve Financial Intelligence

Back in 2001, I remember a schoolmate of mine who introduced me in Multi-Level Marketing business or MLM. It was the very first time that I heard of such system that makes people rich despite of not having a good educational background.

There I saw jeepney drivers, maids, former employees, janitors, and all sorts of poor and middle class people who earns six digit figures a month.

I was so hyped back then that I personally begged my mom to loan me money from her savings account to purchase their product package and become a distributor of health and beauty products.

I was so enthusiastic into selling and sponsoring people to build my network because of the motivational training they provide.

Little by little, my hunger for financial independence increased and I thought that that’s all I need to know.

Fast forward to 2015, I’m still enthusiastic about the idea of being financially free. But why is it that after fourteen years, I still struggle to make ends meet?

For the past seven years of working as a construction specialist, I tried to save money. I make meaningful goals and resolutions about money each year.

But every time I put it into action, I fail. There’s a problem with me that I can’t figure out what. I know I’m motivated, but why can’t I do it?

In the quest for searching for answers, I found out that the reason why I struggle for money is that I dreamed of financial independence but I failed to understand the true meaning of it.

The Real Meaning Of Financial Literacy

Back in 2001, I was let into believing that the only way to be financially free is to produce passive income from MLM systems.

That could be true for most networkers but how could you explain some of them who hit big but eventually lose? One case is that of the late networking legend Jun Kintanar.

What I realized is that these people define financial independence just like washing your hands on a water flowing from the faucet. The water means endless money pouring in to spend on great luxuries but at the end of the day is wasted and goes down the drain.

What they don’t know is how to wash their hands but still keep the water that goes down the drain.

That is why I believe that one must be financially literate in order to achieve true financial independence.

What I observed from my MLM days is that some of the top earners are financially independent but aren’t financially literate.

That explains why there are network marketing people who don’t stay rich once their passive income stops or lessens.

This also explains why you see former actors and actresses in the showbiz industry who live in poverty after being famous for quite some time.

Or a lottery winner that after two to three years end up spending all the money and are left with nothing but debts.

A lot of people earn a lot of money through jobs and businesses but why do they still struggle after all the years of hard work and putting up a business? It is simply because these people don’t know how to leverage the money they earn.

Back then I used to believe that money earned through jobs and businesses should be spent to buy for assets like a house, a car, or in my case a motorcycle.

But after reading Robert T. Kiyosaki’s book entitled “Rich Dad, Poor Dad“, I learned that wealthy people buy assets using the interests on their assets.

To do this, wealthy people buy assets that generate income and from these cash flow that they again buy assets that also generate income to produce even more cash flow.

They do this repeatedly until they build large amounts of assets that generate income which equals or surpasses their daily living expenses.

Another thing that I learned is that the reason most people don’t get rich is because most people are busy buying assets that they think are assets when in fact they are liabilities.

To explain this statement, a house is an asset but when you pay its mortgage and its maintenance costs, it becomes a liability.

A car is an asset but when you pay for its gasoline and maintenance costs, it becomes a liability.

The only way to make a house and a car an asset is when you generate income from it thus turning it into an income-generating-asset.

If you turn your house into a boarding house or have it rented and if you turn your car into a taxi cab or have it rented in a rent-a-car business, then it becomes an asset. This statement challenged my beliefs so much that I had to stop doing what I was doing and say to myself, “What the heck am I doing for the past seven years?”

After I learned about this, it quickly changed the way how I think about money.

3 Simple Steps To Achieve Financial Intelligence

If you are like me who wants to be financially independent, you must first need to learn how to leverage your mind. Knowledge is the best investment that you can give to your mind. Empower your mind to be financially literate.

The next step is to learn how to leverage your money. Start building your income-generating-assets. For someone who earns just enough to cover for living expenses, I recommend the stock market for anyone who wants to build these type of assets and that’s why I’m gonna give it a shot.

Finally, leverage your inner self. Find the motivation that will help you to break all bad habits and keep you on the right track towards your goal.

To your success!

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  • I couldn’t have written this better myself! Great job! 🙂

  • Reblogged this on How to $tuff Your Pig and commented:
    Check out this great post written by Puhunan on the importance of being financially literate!

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