Olivia Marlene is a lawyer who trades the Philippine Stock Market and the forex markets. She is a savings and investing enthusiast.
I've known myself to deviate from norms. It's good to try the road less traveled. You see new views and you may get lucky to see beautiful destinations. If you want to get rich, you may thread the guaranteed pay debts, save, and invest route. I do that, too. But with a little punch.
I don't submit to all the tips given by a financial advisor. I try to experiment with my money. I use my own hypothesis on personal finance and consider how it can help to reach my financial goals.
Financial decisions can be made unique based on circumstances and best interests. If you are curious about what I'm going to share, read my practices. They defy the best financial and investment advice but they make sense.
After reading, you may nod your head and consult me for your retirement planning. :D Who knows?
Without further ado, here are my unique money practices:
1. No to Paying Off Our Mortgage
If we combine all our savings and investments, we can pay-off our mortgage tomorrow. No more interest to pay and no more debts on our name. We can save our supposed to be interest payments and start building our savings again. Looks good. But not so good to convince us.
We don't want to pay off our mortgage and I can vouch that it's good advice on wealth management. The reason? I'm now considering estate planning.
Picture this: You have just enough money to pay your mortgage. Then your best advisor told you to drop whatever debt you have. You believed. You made arrangements with your bank and wrote the check to pay the last big debt in your name.
Finally, you're debt-free but your savings and investment account is now empty.
The next day, as much as you wanted to enjoy your fully-paid house, you went black and bid goodbye to this world. Well, life is unpredictable, it's short, and we don't know when it ends.
So you left the kids with the house but with no savings at all. No liquid cash to withdraw to pay your hospital and funeral bills. They may borrow and there starts the debt. They may get some insurance proceeds but it may only be enough to pay incurred debts due to your demise and your estate taxes.
While the opposite can be this: you let your savings and investments sit for some more and continue making monthly mortgage payments. In your unlikely demise, the kids get to keep both the house fully paid for by the insurance. And they still have your fully-funded emergency savings and investment accounts.
2. Invest Borrowed Money and Use Credit Card for All Possible Expenses
You may have started raising your eyebrows by now. But let me remind you that you are reading a non-conformist view on money that you can't read on money blogs.
Yes, I invest money borrowed WITHOUT interest. Why? So I can get a lump sum amount for my investment. It's a bit boring to slowly add small amounts to savings month per month. Slow growth, no motivation. Sometimes, you are not even motivated to set aside savings anymore because you feel no progress, anyway.
Interest-free loans are usually offered by our office and I avail them all the time. I invest the whole amount and let my office deduct my monthly payments over 24-36 months in my salary. It becomes a sort of forced savings.
What I don't see, I don't mind. I don't see the money coming in as part of my paycheck, so I don't account it as an income and I don't include it in my budget. Now the good thing is, the money is long working for me as part of my investment.
And my credit cards? I love to use them for all transactions that accept them. Why? I love the points. I love freebies. Don't worry, I pay them in full, so I don't pay any interest to them. Most of the time I even get money from them by converting my points to a cash equivalent.
Borrowed money and credit cards can be tools to help us achieve success in our financial lives if used properly.
3. No to Listing Up to the Smallest Expense
Listing up to the smallest expenses and being overly OA on your budget defies the law of abundance. When you are so strict with your budget with cutting here and there, it brings a mindset of scarcity. And let me tell you that it brings more scarcity.
Remember that what you focus on expands.
Let me give you a secret. Focus on abundance. List down "money earned through not spending" instead of focusing on money spent. How to do it? I will explain.
Once you have your budget for the month laid out, don't list your expenses. List what you didn't spend. For example, your budget for your weekly dining outs is $100.00 but you decided to just cook at home. List down $100.00 as money saved. Your electricity bill went down by $50.00 this month? List it down as $50.00 saved.
What is the difference between this with the usual list down all your expenses? This different approach focuses on the positive. It focuses on the money kept rather than the money spent.
If you do this, you will be attracting more money to be kept. You will notice that you will forego mindless expenses. You will begin ditching sugary ice cream just for you to list something on your money-kept diary.
I hope I have tickled and challenged your financial beliefs. Sometimes it pays not to strictly follow bookish advice. A mix of our own view is also healthy. Challenging norms can lead to innovations. The bottom line is, it's our life and it's our money.
This content reflects the personal opinions of the author. It is accurate and true to the best of the author’s knowledge and should not be substituted for impartial fact or advice in legal, political, or personal matters.
© 2020 Olivia Marlene