IT is already the Lunar New Year’s Eve of the Tiger and a lot of Mainland Chinese brave Covid to head to their home. Hopefully, there will be no resulting new pandemic.
Here in the Philippines, due to the pandemic, the usual dragon dance celebration did not materialize as this is a potential spreader event. The Chinoy community has to contend with buying “tikoys” and giving “angpaos” to family members as their simple celebration. As a Chinoy myself, I am amused to see Filipinos celebrate with us. However, not only did our ancestors from the mainland bring this tradition, they also brought with them the secret to wealth. Let me share what my grandmother did.
1. Save a lot. My grandmother was a very shrewd businesswoman. She had a merchandise store and a lot of loyal clients. From her business she made good income. She made it a point to spend only 10 centavos for every 1-peso earnings. Effectively, she saved 90 percent of her income. No wonder, at the time of her death, she left behind a number of gold bars to her children. This is proof that the fastest way to build wealth is to build it slow. She did not believe in get-rich-quick schemes. Learning from her, as an employee before, I saved 50 percent of my income and 100 percent of my bonuses since I was single and had no expenses.
2. Never be greedy. As a businesswoman, she never indulged in overpricing, even if her store is the only one that had the items needed. As long as she did not take advantage of her clients, she is sure to have repeat sales. For her, greed is the highway to failure. As a businessman, I applied the same principle and true enough, we became the preferred service provider of my client due to fair price and good after- sales service.
3. Learn to network. When the Japanese came, everybody was afraid, my grandmother included. But later she turned that fear into an opportunity as she bravely networked with the Japanese and they also became her loyal clients. I still remember my childhood where I was playing with a bundle of Japanese money, not knowing it was my grandmother’s money (but without any value anymore). When I was in sales, I learned to network and true enough my income shot up. Indeed, your network will define your net worth. Who you know is more important than what you know.
4. Spend wisely. My grandmother inculcated values in my father and my father did the same. Conclusively, I have my grandmother’s attitude towards money. Before I spend money, I make sure I spend it on things I need, not want. And when I spend, I buy those with good quality so that I need not buy often. As proof, I still wear clothes even if they were bought 20 years ago. As a matter of fact, I get to have new clothes as gift from relatives or friends.
5. Minimize expenses. Above my grandmother’s store is their residence. It makes perfect sense because only one property is rented for two purposes, residence and business. Having a residence and business rented separately will just increase the total rental fee. When I retired in 2013 from the corporate world, I opened my business. Initially I thought of renting an office but changed my mind and made my home my office. That way, by minimizing expenses, I increase the profit of my business and my income as well.
6. Make money work. My grandmother not only saved. She invested as well. She re-invested the money earned by buying more items for her store. Remember her saving 90 percent of the income. She made that a new capital to buy more items to sell. Early on, she made money work via compounding. Starting from my childhood, whenever I see my money earn interest, it is my income from my money which earned it. I never spent the interest, a habit I have up to now. As long as I am earning income, I will let my money continue to make money for me. As I am into my own business, I am now mentoring my son in his small business where I taught him the principle of compounding his money via his endeavour.
Majority of Chinoys of today started from scratch and for sure they have applied or improved the above principles. I encourage readers to try the Way of the Chinoys and success is just nearby.
Edmund Lao is a registered financial planner of RFP Philippines. To learn more about personal-financial planning, attend the 94th RFP program in March 2022. To inquire, e-mail info@rfp.ph or text at 0917-6248110.