A Good Man Leaves an Inheritance to His Children's Children

As good parents we ought to try our very best to leave inheritance not just to our children but to our children's children. But, for that to materialised in the future, the first step I guess is to educate ourselves to become financially savvy as early as possible. One thing I learned so far is that time is really valuable if not the key for it to become reality. The early we are financially educated and is acting upon it the longer the time frame our savings will work for itself. Perhaps, you don't have an idea or confused of what I'm saying right now but, once you understand how compounding money works you'll appreciate more what is TIME in relation to savings. Have you known someone who just spend 1 year worth of their salary for one grand extravagant feast? Yet, not bothered about the expenses incurred because as he or she say, that 1 year worth of salary can still be earned next year. Well, I guess it's okay if:

(1) We have accumulated enough savings already, and that 1 year is just a pinch of our savings 

(2) We are young and our parents are rich and money is not really an issue 

(3) Our time in this world is counted, I mean what for is the used of savings if by few years we are gone anyway unless of course we're saving for someone else 

(4) Though not rich, but still young and still have few years to waste for foolishness. 

But, if we are just trying to make an impression and is not one of the mentioned above, who are we fooling? I guess ourselves. Being financially educated, we're supposed to realised that at least small portion of that 1 year worth of extravagant feast could have started growing or already have grown by now. 

What's my point? If we have learned to become financially savvy after throwing the feast at a very late stage of our life, we'll have no enough time frame for our savings to grow, this time around, time is against us no matter how we try. So, we end up depending on our luck (lotto and other alike) or we depends on our children's and perhaps their children's too. 

How does this relate to the subject? If we intend as parents to leave inheritance to our children's children, we better be financially educated and ACT upon it while time is still in favour of us. Otherwise, no matter how we try later on, like what I said, we'll either depend on luck (lotto) or perhaps the government (pension) or on our children itself or ALL. 

Read How to Manage Cashflow: Click here
Read The Importance of Emergency Fund: Click here

Two of Mostly Misinterpreted Verses in Bible that Drawback Prosperity

First this bible verse:

Genesis 1:28 New International Version (NIV)

28 God blessed them and said to them, “BE FRUITFUL and increase in number; fill the earth and subdue it. Rule over the fish in the sea and the birds in the sky and over every living creature that moves on the ground.”

Reading this verse, I remember a father who hardly cope up in providing his family daily needs, yet, almost yearly the wife give birth. And, when asked why keep in reproducing even if cannot afford to take care of the incoming child? The answer was, because it's the will of God to multiply therefore it's a blessing and God will provide. Few years ago, it was also my notion so, I assume that even now someone or perhaps great majority of us still have this notion. But then, thankfully someone made me aware of the verse and noticed that before increase in number it does say be FRUITFUL first. What does fruitful means? In dictionary, one of the meaning simply means successful. So, it implies for those who believe and practice christianity that before increasing in number, the head of the family ought to be successful, prolific or at least capable enough to provide for the upcoming offspring. Now it make sense, God won't simply say increase in number without thinking about the needed provision, right? After all, God as characterised in the bible is a planner to our benefit "Jeremiah 29:11 For I know the plans I have for you," says the LORD. "They are plans for good and not for disaster, to give you a future and a hope"

2nd: this verse.

1 Timothy 6:10 New International Version (NIV)

10 For the LOVE of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.

Most probably, you already had heard about this one. It simply says, money is not the root of all evil, it's the LOVE of it. But, I think even after realising this verse, when we start to chase after money we tend to love it. No wonder, the bible also says in  "Matthew 6:24 - No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money". So, is that it, I mean is it therefore better not to chase prosperity? I believe this again is a common notion for Christians alike, this is maybe why a lot of those who strongly believe in Christianity and practice the faith are either lacking in motivation to chase prosperity or, care less about it as long as they can go about their daily lives without really thinking and planning about their future and their children's future. Yet in contrary, He plans to prosper us "Jeremiah 29:11". So, is there ever a way or a solution so that whenever we try to chase prosperity we will not be pierced with many grief? Well, I think there is, it's GIVING. Giving while chasing prosperity will I think help us to not be greedy. 

Perhaps, these are just two of the few other bible verses related to finance that I think mostly misinterpreted, thus, Christians who try to practice the faith as according to the book somehow (not all though) drawback to chase prosperity

-end-

X-CURVE FINANCIAL CONCEPT DISSECTED

Let me share to you a concept we called the X- Curve, this concept basically simplifies our personal financial planning. 

Lets start with this line and call it our age line, the left side will be our  younger years and right as our older years. Now, during our younger years which probably where we at now. This is the point in time where we usually have huge responsibility, and also the point in time where we usually work so hard for the money, our paycheck or income usually goes to these responsibilities and basic needs such as food, shelter, clothing. About this time also we start to build our own family, we get married  have children and for that we oftentimes acquire Debt, Loans and mortgages. Education for our children is also part of that big responsibility, same as family health care of course. 

The red curve line as shown is our responsibility line which should decrease the older we get. Ideally, our responsibility such as debt, mortgages, children education should have been fulfilled by this time to such that we have no more responsibility other than our basic needs. During our younger years, usually we have no savings because as I said, at this point in time we have big responsibility and that our income are often enough to cope up with this responsibilities. The green curve line as shown is our wealth or saving  line, ideally, our wealth if we build it wisely and correctly should increase over time. And when we get older, we would want to have big savings. At this point in time, what we wanted is that money should already be working for us. Meaning, we live on interest, exceedingly enough to cover our basic needs such as food, shelter and clothing. Even more than enough to cover our retirement, healthcare and should already be debt free. 

Going back to our younger years, at this time, we are less secure. As life is full of uncertainty, anything could happen along the way, we could lose our job or get sick. That is why we need to create an emergency fund that will serve as our contingency plan whenever those kind of situation occur. As recommended by most financial adviser, 3-6 months of our salary should be our emergency fund. And this fund should be easy to liquidate. 

Another problem while in the process of building wealth are facing the so called two "if's" of life. What if, we die to soon? Most often than not, we are building our wealth not for us but for those who matters to us. And in that sense while we are building our wealth, if we don't get a protection not for ourselves but for them and something unfortunate happen to us, we might just end up defeating our own purpose . We should make sure then, that the life of those people who matter to us if something unfortunate happen should still continue as we intended it to be, after all, they are our strong emotional reason why we have strong desire to be truly rich. Unless of course, we intended to be rich for our sake alone, in that case, it's pointless to get an insurance because, though you are insured, who's going to benefit if we already perish ? Right? We came in to this world with nothing and surely, the only certain in this life is that we will also exit empty handed. No argument with that for sure. 

Another "if" of life is what if we live to long? This time we should have prepared a long term  investment. If we are to invest long term, it is important to consider economic factors such as Inflation and interest rate, because if we don't consider this factors especially inflation rate and invest with a return less than this rate, our investment intended for long term will depreciate overtime. Therefore, choose investment vehicle that will yield higher rate than inflation rate, and I'm pretty sure bank is not among of them. 

Long term investment is intended for us to be secure and cover ourselves  from  our living expenses after our retirement exceedingly enough so that we don't disturb the financial planning of those people who matters around us. Lucky for us, if our children have more than enough to cover for our living expenses. But if they are struggling financially, we might end up in the home for the aged, telling others about our wits, exploits, experiences and profession during our younger years and yet, all but history and at the end of the day, we still can't cover our own expenses. We don't want that to happen, right?

Basically, the X-curve tells us to work hard now and relax later. It doesn't mean we deprived ourselves from enjoying sometime.  But at least, keep track our expenses and know our priorities. One question though, do you think this is the reality now? Well, for some, Yes! Those were the wealthy people who realize early how to build wealth wisely and correctly over time. Most often than not, like what I said earlier, our senior citizen at the age where they are force to retire have no enough money to cover for their living expenses especially healthcare. Do you agree that if we live to long our health will eventually fade? Do you also agree that health care will be a very big chunk on our living expenses when we get old? Who do you want to pay for it? Do you want to depend on our  children later on? Do you expect that your responsibility now to your children financially be returned later on as if your children owe you?  For me, I will never view my responsibility to them as such and, I definitely don't want to disturb their personal financial planning just because I cannot cover my own expenses. It's definitely better for me to take care of myself financially later on. But, how Am I going to that? 

This is where the IMG's 6 steps to financial security comes to play.