Why Should You Get Life Insurance

How important is a life insurance?

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Let me share a story of a couple I know from two years ago.

Lucy and Ruben (not their real names) are married with two children, aged 9 and 11. 

They were happy as a family until a tragic incident happened to Ruben. One afternoon, he complained of a severe headache. 

Believing that it was just a typical migraine, he ignored it. After a week or so, he lost consciousness and was brought to the hospital. 

He did not recover from that event and became comatose.

It was found out that he had a terminal tumor of the brain and the doctors were unsure when he would be conscious again. 

To cut the story short, he never recovered and totally gave in and died.

It was an indescribably painful experience for Lucy because of Ruben’s sudden death. She told me that it would have been more painful if they did not pursue the life insurance which they bought when Ruben was still undiagnosed. 

They were actually quite hesitant to obtain one because they didn’t believe in any kind of insurance.

Though it seemed quite awkward to talk about death benefits and all that, it made a big difference for the surviving family members to be left with something to start with in case of the breadwinner’s demise. 

Lucy, being financially dependent on Ruben, would not have known what to do to be able to raise their children. But because Ruben was insured, his family’s future was ensured.

I am a believer of any sort of insurance. 

I know that there are only two things that are certain in this world, taxes and death – with the former being mandatory while the latter being optional. 

Even before Lucy’s tragic experience, my husband and I both have life insurance coverage in the event of any unfavorable incident. 

For us, buying a life insurance is paying for our peace of mind.

Ensuring Financial Security You know you have ensured your financial security when you are able to establish priorities of your wealth building objectives. Here’s how your financial house should look like:

Priority 1: Protection Management 

This is considered to be the “foundation” of your financial independence by way of securing a LIFE INSURANCE in the event of an untimely death of the family’s breadwinner. 

Priority 2: Debt Solution 
This is where you establish a game plan towards becoming debt-free the soonest. 

Priority 3: Asset Management 
This is where you should save enough for a more secure retirement, for your children’s future education expenses, and for other future goals and dreams. 

Priority 4: Income Management 
This last priority is where you can improve or add income streams to fund the shortfalls in your financial goals. 

Overall, ensuring your loved ones’ future is more than enough to show how much you care for them because you don’t want them to get burdened as a consequence of your loss. Insurance is created for the sole purpose of protection in case of an unanticipated incident. 

Though insurance is believed to be not for everyone, it should be taken advantaged by the majority of the population, especially those with financial dependents. Since there’s a variety of insurance available in the market, one should avail only according to his purpose/ needs, dependents, and of course affordability. 

Because nobody is certain where life will take us, having insurance (both life and non-life) will give us peace of mind. 

Now, are you still having second thoughts? What’s keeping you from protecting your loved ones’ future? Never delay. Make your way and ensure to insure!

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How To Duplicate Your Current Income

There are basically only two kinds of income in the world.

Active Income and Passive Income.

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1. Active Income 

How do I define active income? You exchange your time for money. 

A skilled laborer exchanges one day of work for P500. 

A manager exchanges one day of work for P5000. 

A dentist will pull your tooth for P600. 

A heart surgeon will do a bypass for P300,000. 

What do they have in common? All of them exchange time for money. 

When they stop working, they stop earning. 

Let me give you an example. 

Ate Guy is the terrific masseuse of my wife who offers massage and torture at the same time. Lucky for her, there are enough deranged people in the world who want that type of massage. 

So Ate Guy is always in demand. She can massage five clients a day and she usually does. Because of this, she earns P50,000 a month. 

But let’s say she takes a vacation. Her earnings drop to zero. And when she gets older, let’s say she doesn’t want to work this hard anymore. Instead of five clients a day, she wants to massage only two people a day. But if she does that, her income will go down a lot. Or what if Ate Guy wants to earn P100,000 a month? She can’t massage 10 people a day. Sure, she can raise her prices, but by only so much. My point? Active income is limited.

The only way to earn more is by switching to passive income. And the only way to do that is by duplicating herself. First, she can train other women the “Ate Guy Torture Therapy” and form an army of Ate Guy-Trained Torture Therapists—and earn a commission from each of them. 

Second, she can create the “Ate Guy Healing Oil” in a bottle, ask other masseuses to sell them. I repeat: Active income has a limit. But passive income is virtually limitless. 

2. Passive Income 

Do you want to prosper? You need to create passive income. Passive income is the secret of the wealthy. In active income, you exchange your time for money. In passive income, you still exchange time for money. But you’re no longer exchanging your time—but the time of your duplicate. You exchange your duplicate’s time for money. You can stop working and money still flows into your life. 

How to create passive income? There’s really only one way to do it: You have to duplicate yourself. And the best way of duplicating is..

Form Teams

You Form Teams 

There’s a Chinese proverb that says: 

If you want one year of prosperity, grow seeds. 

If you want ten years of prosperity, grow trees. 

If you want a lifetime of prosperity, grow people. 

When you form a team around you, you prosper. 

My friend PJ works as an IT professional. Last year, he decided to start a sideline. He started selling pre-selling condos. That was like taking a second job. So that was still active income. But soon after, he hired six of his friends to sell for him. If they make a sale, he earns a commission. When PJ did that, he crossed the line from active income to passive income. The moment you form a team around you, you switch to passive income. 

Sell Things Through Teams 

If you’re selling products by yourself, that’s still active income. But if you sell through teams, you’ve moved to passive income. 

Let me give you an example. When I was a kid, I liked going to this tiny bakery selling Spanish Bread. It was my favorite snack. Butter and sugar inside the soft roll. Yum. The bakery was really a hole in the wall. Very tiny. But every time I went there, there was this tricycle outside. And she would haul crates of the bread into a tricycle. What did this mean? She was delivering to 30 stores who were selling her Spanish Bread.

What was she doing? Duplication. If she sold the Spanish Bread all by herself, that was active income. The moment she asked other stores to sell for her, she crossed the line from active income to passive income. The result of duplication was astounding. 

Four years later, I saw that little store become a four-story building. All built by Spanish Bread. 

Duplicate Yourself to Duplicate Your Income.

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What To Do When Facing Foreclosures

I bumped into my old neighbor who have a lot of businesses. I thought it’s doing good.

He is one of the right hand person of a politician. I learned that when that politician lost in the election, all his business flunked. 

He knew that I’m into real estate and asked me this question "my condominium in the Fort Global City is facing foreclosure from a developer. The property is still pre-selling, and I really don’t have the money to pay for the arrears (unpaid amortization). Can you help me?” 

For a moment I hesitated because I don’t like this man. He is known to be the person giving money every election for his politician boss. But Luke 6:33 says, “And if you do good to those who do good to you, what benefit is that to you? For even sinners do the same.” 

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Here are the tips I told him: 

1. Don’t ignore bank/developers/lenders letter. Pay attention to them. Call them or reply to their letters. This will show your intention of facing your obligation but explain that you’re in a tight situation now. 

2. Ask for leniency. You can create a letter addressed to the Manager or Head of Credit to ask to delay payments for a short period of time. Ask for 2-3 months. 

3. Ask for interest payment only. Give specific time when you’re going to pay the principal. 

4. Ask to change your payment scheme. If possible, extend your term longer to have lower amortization. And whenever you have extra cash to pay, ask the bank to allow you to pay the principal to save from future interest. 

5. Ask for a refinancing plan. You can transfer the loan to other banks. Sometimes this can be favorable for you since the other bank might appraise your property higher and you can leverage on this. 

6. If you owe the developer, if you already paid two years amortization, by law you are entitled to get 50 percent of your payment. But if your lender is the bank, no single penny will be returned to you. 

7. Sell it really low — lower than the market price. The allowance that the bank/lender gives you, also gives you time to sell your property at a profitable price. 

8. Sell it again. Let someone assume your mortgages. Sell it even though you lose some money. At least you get some rather than nothing. There are creative and legal ways to do it. In the end, I helped our neighbor sell his property at a very very low price. He already paid Php 800,000 to the developer but when we sold it he only got 600,000. He lost 200,000. A few days more, he will have lost everything with foreclosure. He was able to use that money to build his business again. 

When you are not able to pay the amortization in the next few months, act on it. Don’t wait for credit letters to come. 

Sometimes we have to accept that we fail in doing specific real estate investment, especially buying preselling properties. When you are able to accept your failure, you will be able to accept the highest possible amount you can get out of your property. Then you can always move on to the next property suitable and profitable for you.

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The Best Investment in the World

You’ve heard me say that the stock market is the best, easiest, most PROFITABLE investment you can ever make. 

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But there’s one investment that beats the stock market, hands down. 

Shocked? It’s true. 

The best investment is investing in YOURSELF. 

At the beginning, when I started buying books or attending seminars, it hurt. Because they were expensive.

At least, in my “poverty-conscious” mind, it was expensive. But as the years went by, I no longer saw buying a book or attending a seminar as expensive.

It was cheap considering the PROFIT I will earn when I apply what I learned. In my lifetime, I’ve bought almost a million pesos worth of books.

I’ve paid lots of money to attend seminars and workshops all over the world, paying for my plane fares and hotels, forking out millions over my lifetime.

Not only that, I’ve paid for “online courses” that have doubled and tripled my income over time too. 

Yes, I’ve gotten back all my investments to my learning multiplied many, many times! Are you ready to invest in yourself?

Hey, investing in yourself doesn’t even have to be that big. Sometimes, it could be very small but the returns can be out of this world too.

 Classic example? The TRC. For only P497 or P975 a month, you can already invest in the stock market with confidence and build a sizable retirement fund that will be in MILLIONS in the next 20 years or more. 

You can learn strategic insights that will save you from so many financial troubles and make you earn so much more. 

You’ll be surrounded by mentors who will inspire you and guide you in building your business throughout the year. 

Do you want to double your earning?

Double your learning. No matter how successful you become, always be an eternal student.

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What Can Harm Your Business?

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Call me crazy.

But someone who is starting his first business shouldn’t have a lot of cash.

I believe a lot of cash can harm you more than help you.

So if you’re starting your first business now and you have very little cash—thank God!

It’s one of His sweet blessings to you.

Why?

You’ll learn to “make do”.

• You’ll learn to work from home. (Don’t rent office space yet!) 
• You’ll learn to use what you have. (Don’t buy new stuff yet!) 

Besides, it will be a fantastic story to tell 20 years from now.

You’ll be able to tell your kids, “I started this giant company 20 years ago in my living room. I started with only P15,000…”

Here’s another reason why having a lot of money at the start of your first business is bad for you… 

First Businesses Usually Fail 

When you start your first business, you’ll fail.

Sorry to be the one to bring the bad news.

But if you really think about it, it isn’t really bad news.

Because failure isn’t God’s Rejection. Failure is God’s Redirection.

No, not ALL first businesses will vanish into thin air. Some will survive.

But these will be revised, rehashed, redesigned, rebuilt… 

My Story of Failure 

Once upon a time, I had P600,000 in savings.

I was bent on starting my business.

Feeling confident because I had P600,000 in my hands, I looked for a business.

There’s the mistake.

Your money isn’t the reason why you go into business.

You go into a business because you have a GIFT you want to give to the world. Not your money.

It’s your gift that people need!

Anyway, back to my story.

Someone told me about a hotdog stand in a brand new mall.

Since I had my cash, I bought the franchise for P250,000.

Monthly rental was P18,000. I still had money left! What should I do with it? 

The mall offered me another stall, right beside it.

Since I had money left, I bought another franchise for another P250,000.

This time, it was an ice cream scooping station.

That required another monthly rental of P18,000.

I figured: What could go wrong? It was such a simple business.

But everything went wrong.

Looking back, I did no research.

I never studied who the main shoppers were, and thus, whether they would like hotdogs or ice cream.

I also didn’t know anything about the business.

I didn’t even look for a mentor who could guide me.

It was all a leap in the dark. I literally “jumped” into it blind.

What happened?

The moment I opened it, the business began to bleed.

My monthly expenses were much more than my profits.

Instead of earning, I was losing P20,000 a month!

After five months, I closed the stores. I lost P600,000 on that business.

Yes, I lost everything I had. 

Focus on Your Gift, Not on Your Cash 

Having big cash and little business sense is a dangerous mix.

Because you’ll be in a hurry to “plunk” it into your first business, not understanding that first businesses usually fail.

My suggestion? If you stick to your core gift, you’ll be able to find a business that doesn’t need much cash. 

My first successful business

My first successful business needed Only P100,000 My husband and I never sent our kids to school.

Instead, we’ve been nuts enough to “homeschool” them.

And we loved it. When friends learned about it, they wanted us to help them homeschool their kids too.

Because it was our passion, we said yes.

So I created Homeschool Pangasinan.

How much capital did I need to set it up?

Around P100,000.

To buy one computer and one desk.

Plus advance payments for a bunch of writers who made our teachers manuals.

That was it. We started with 36 kids on our first year.

Around eight kids were the kids of the staff—so they were free.

We really had only 28 paying students.

That was five years ago. Today, we have 200 kids enrolled.

We aim to keep growing every year. 

My Point? Start Your Business without Much Cash 

I could go on and on, telling you one story after another.

I’m allergic to wannabe entrepreneurs with lots of cash.

From experience, they lose it!

What’s the winning combination of entrepreneurial success?

A lot of passion and very little cash!

Why?

Because “very little cash” will force you to be more creative, more imaginative, more persevering, more sacrificial… Stuff necessary for a great entrepreneur.

Believe me, I’ve heard of horror stories of kids of very wealthy parents who started businesses with the help of Daddy’s money and then lost millions.

Because money is too easy for them. Money isn’t valued. So they’re careless with it.

When You Have Much Wisdom, That’s the Time to Get Cash 

Later on, as you grow in your business skills—and you begin to taste small successes—that’s the time to borrow money to expand your business. 

For example: As I entered into new businesses and real estate ventures, I borrowed money.

But when I did this, I already had some business skills under my belt.

At one point, my total debt was P10M.

Thankfully, all these were loans not to banks but small loans given to me by Kamag-anak Incorporated: My mother, my sister, my mother-in-law, my uncle-in-law, etc. I paid them a monthly interest on their money—all postdated checks.

These people knew I was trustworthy. (This is essential. Business is about relationships.)

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