Financially Taught by IMG

Appropriately, my first post would be related to the company called International Marketing Group and its Wealth Academy since they made me gain interest and knowledge about finances. But before I introduce to you this company, I would like to tell about myself first on how I started my journey to financial freedom.

When I was fresh out of college and into to the unemployment line, I asked myself this question: "How do I make my money into a million?"

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I was thinking about it, then I realized I suck at Chemistry

I was thinking, if I had a salary of Php 10,000 a month, then I would be earning Php 120,000 a year. But then again, I can't have all of that money because I have to spend it for expenses, emergencies (in case the need arises,) and the things I want.

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Things I want

If I would have to deduct my yearly salary, I would probably just have more or less 25,000 left. If I add that every year, I would reach a million pesos around 40 years.

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40 years later

I wanted that time span to shorten to at least 10 years. I thought about having a business,  but I don't have the brains and the skills to confidently handle one, yet. I thought about investing, but, again, no knowledge on how to do it. Then, God sent me an angel armed with a survey form and the gift that could answer my queries. (And the angel is probably laughing... or embarrassed... or whatever as she reads this post.)

She invited me to a seminar on Saturdays. Eager and thinking I had nothing better to do on a Saturday night, I gladly went to the seminar. When I was on my way to the 2nd floor of JY Square (its location in Cebu), my thoughts were shifting between eagerness and doubting of what I'm about to do.

Eager thoughts:  My feeble brain will learn something about investment today. My questions will probably be answered. Investment, investment and investment.

Doubts: Is this another networking company? The seminar is for free. What's the catch? Are they going to sell me anything?

When I finally sat and listened (while the aircon was gradually freezing me to death), my eager thoughts and my doubts about finances and the company were answered, corrected, and disproved greatly. I could tell you a lot, but I'll just stick to the ones that really impacted me and also answer the doubts.

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That picture right up there showed me the error of my ways in investing and finances. I was only thinking about investing but didn't really thought about my health, my mortality, and my money allocated for an emergency fund. So here are my different realizations on each step.

(Note: I left out eliminating debt because I don't really have one to begin with and I am not really into loans--unless it is used as an asset--and credit cards which you have to pay big interest. But I will tell you how to eliminate debt in a future posts, because, you know, it's helpful.)

Healthcare

If I just started investing and without any healthcare, then where would I get the money for my medical needs? My savings account? Most probably, but there's a high chance that my savings would deplete from all the health expenses like say for example recovering serious injuries from a vehicular accident (not including repair expenses). Where do I get the money now? My investment? That would be the next scenario and there is a high chance when I claim it, I will be losing money than I initially invested. If I don't have an investment, I could ask for my friends to lend me some money but I'm gaining debt. In which I have learned in IMG, should be zero as much as possible. Healthcare is very essential in avoiding those expenses.

Life Insurance

I was thinking too much about gaining money that I forgot about the probability of me dying while I earn said money. I wasn't designed to be immortal and neither are the rest of the people of this planet (unless you are, then I apologize for the overgeneralization.) If I died without any insurance, what will happen to my family? If I had wife and kids, I would be worried about what will happen to them especially if I'm the only provider. If I had debts, then all of that burden will be passed on to the family that I left. I don't want to be a burden, and I certainly won't let that happen.

What would happen if I had life insurance?

For example, if I just recently bought life insurance for Php 10,000 and also invested another Php 10,000 on investments and died because I slipped on a banana peel, then tripped and dunked on a pool of chemicals which evidently is my COD (which disappoints me in the afterlife because of not having superpowers) the next day, the scenario would be is that my investment will give my family back the Php 10,000, but my insurance will give my family Php 2,000,000 (depends really on the insurance premium that you bought.)
You don't have to worry about not providing your family anymore in case something tragic happens. (You should also educate your spouse or your parents or sibling/s about finances. You know, in case they're your beneficiaries at least they know how to use that money).

Emergency Fund

An Emergency Fund is mainly used for the purpose of emergencies (duh?) like a fire burning down your house, a storm destroying your property, your car or motorcycle needs repairing after an accident (the following examples can be excluded if you have non-life insurance), or a recent termination from work which renders you to unable to pay for your expenses because of lack of income.

Before I learned about emergency fund, I did have an emergency fund but the problem with it is that it was also my "Wants Fund". If I wanted to buy something like say a new smartphone, then my emergency fund would be sacrificed. And if my house suddenly starts burning, I would be in a real conundrum. I separated the two, and always disciplined myself not to use my emergency fund for non-emergencies like an emergency sale in the mall as an example.

Investment

Now that I learned about the necessities before investing, it's time for the part where I was so eager about in the beginning and was answered. I get to learn about Mutual Funds and the investment strategy of Peso Cost Averaging which lowers the volatility of investing. (I won't divulge much in this post but I'll write another posts just for this... and I can't cram everything in one post.)

My Doubts Disproved

Q: Is this another networking company?
A: Definitely not. IMG is a financial distribution company which caters to peoples financial needs. The Wealth Academy provides free seminars that can really help you in your financial knowledge. And, also, I'm not a big fan of networking. The part where they say it's a get rich quick scheme and you can do it in your spare time really dissuades me from joining because it's not true. Better read it from Mr. Fitz Villafuerte for an unbiased outlook on networking here.

Q: The seminar is free. What's the catch?
A: No catch. Just listen attentively to the seminar and evaluate what you have learned. Better judge after the seminar, not before. (If you're just gonna spurt something negative without even knowing and attending, you really should check about that pessimistic attitude of yours.)

Q: Are they going to sell me anything?
A: I got home without any products bought. The only thing I got was the realization that I have low financial IQ and definitely should increase it. IMG does have products from legit and respectable companies (Philamlife, Philequity, SMDC, Malayan, etc.) but is not the focus of the seminar. You came their to know about finances, you'll learn finances.

Q: Is it a scam?
A: 100% nope. You see, one way how I check if a company is legit is by going to the Securities and Exchange Commission website www.sec.gov.ph and look at the list of companies that are registered (try searching International Marketing Group, or any investment or insurance company that you know of as a trial). If it is not found, you better stay away from that company. (I'll give more additional information on how to know if a company is a scam.)

On my next post, I will tell you what IMG is all about.