Laws of Money

       I have first heard of Suze Orman when I attended a financial workshop in 2014,  but it was only now that I really had a chance to hear and read about Suze Orman’s lessons.  In her video, Suze cited 5 basic laws of money, which made me reflect on what I have done, currently doing and what will do next.  These lessons gave me more drive to pursue my chosen topic for my Management Action Research, which is to conduct Financial Literacy Program to our employees.  These are some lessons worth sharing with my friends, family members and colleagues:

Lesson 1:  Truth Creates Money, Lies Destroy It.

Suze has cited some examples which reflect the reality, and I was really guilty of.  First example is when your best friend asked you if it’s ok to borrow some cash to finance a certain loan or investment.  Deep inside, you know that she won’t be able to pay as promised, but you ended up lending her money because of your friendship.  For Suze, this is a form of a lie.  But in reality, particularly for Filipino culture, this is already a way of life.  Filipinos in general really value relationships, particularly the family.  If someone is in need, particularly if a close friend and a relative, most of us go out of our way just to extend help.  Oftentimes, Filipinos find it very hard to say “no”, even if in reality, we do not have means to extend financial help.   

        Another example she cited is when we purchase items using credit card, to feel good or feel that we can also afford what the people around us can afford.  Anyway, we will pay when the bill is due.  This is indeed very true and I am guilty of this since I’m a credit card user.  I admit that there were times wherein the truth is - I really can’t afford to buy a certain item.  But because we want to blend with the society, or because we don’t want to get insulted by the people around us, we are trying to project another image.  Thank God my husband helped me change this habit, and helped me control my purchases which I really cannot afford.  

Lesson 2: Look what you have, not at what you had.

Our decisions are usually based on past, and we are afraid to look forward.  I remember when I was still starting exploring the stock market.  I invested in Double Dragon at a very low price, but sold after a few months when I didn’t see an improvement.  A few months later, when I pulled out some more investments to finance other needs, Double Dragon’s value increased significantly.  I really regretted selling at an early stage, and now, I am hesitating to invest in the stock market again.  This is a perfect example of making my decision based on the past.  Instead of doing nothing about it and not making my money grow, I should look at what I have today, keep looking forward---invest----and wait more patiently.  

Lesson 3: Do what is right for you before you do what is right for your money.

According to Suze Orman, “The quality of your life can be affected just as much by how you feel about your decisions as it can by the decisions themselves” and that “Money flows through all of your life aspects, and you will not know what is best for your money until you know what is best for you.”  In the third lesson of her book, I have answered an assessment on “finding your unique balance.” Based on the results, I have a “high need for safety, comfort, and known quantities” in my life, I should consider them if making my decisions.  It also appeared that I have a “high interest in adventure, risk and challenge”.   Putting this into action, knowing that I have a high need of safety and that I have a high interest in adventure, risk and challenge, I should already start doing something in my investments. On the safety side, I should continue setting aside for my savings through a capital contribution.  This might not earn a high profit, but I am confident that it will just be there, safe and sound.  On the riskier side, I should start investing in the stock market or mutual fund again.  This will somehow create a balance in making my investment decisions.  

Lesson 4:  Invest in the known before the unknown.

Before making ‘unknown’ investments like investing in stocks, it is but appropriate to look at the ‘known’ items first like actual historical income and expenses.  What are the expenses that can be cut or avoided?  What are the other ways to increase the income?  For cutting the expenses, I am proud that I have already removed the habit of not paying 100% of the credit card due amount, and I have maintained such habit for more than 5 years already.  Despite receiving offers from various credit card companies, I opted to reject those and just stick with my current card, which is an extension of my husband’s.  In this way, knowing that someone monitors my expenses, I become more disciplined in handling my finances.  

Lesson 5: Always remember: money has no power of its own. 

I have what it takes to make my life more powerful, to make my money grow, to create what I deserve, and to keep what I have.  Money is just a tool and it doesn’t have the power to control me.  I firmly believe on this mantra, but I guess most people are not.  For most people, it’s actually not the money that controls them.  It’s their own greed for power and money that controls them, thus resulting to wrong decisions and actions.