The secrets to becoming rich

If you see yourself as prosperous, you will be. If you see yourself as continually hard up, that is exactly what you will be. — Robert Collier

Within each of us lies the power of our consent to health and sickness, to riches and poverty, to freedom and to slavery. It is we who control these, and not another. — Richard Bach

It requires a great deal of boldness and a great deal of caution to make a great fortune, and when you have it, it requires 10 times as much skill to keep it. — Ralph Waldo Emerson

One of the thrills of my choosing to write often about business, the greatness of the free-enterprise system and most especially about “rags-to-riches” success sagas is my having learned a lot of priceless lessons about how ordinary people with extraordinary dreams have lifted themselves up from poverty to economic liberation. Yes, that is what being rich to me is all about. It is not nice cars or fancy houses that are truly important; it’s not just freedom from want; it is ultimately the luxury of having many options in life.

No one is fated to be poor: Success is our Destiny!

It is hogwash to think we are somehow predestined or fated to be poor, that we are hapless or helpless “victims of fate.” I believe all of us are alive on this earth by God’s grace to be rich and financially free! Not even for one second have I ever doubted that success is our destiny. Whatever crises have come my way, I view them only as temporary setbacks or surmountable aberrations to my ultimate goal and destiny.

We need to work hard, have an indestructible, positive attitude, dream, learn nonstop, never surrender to any obstacles, wisely manage our money and resolutely claim our birthright of success. We should learn from traditional Chinese culture, which is fixated — even obsessed — with good fortune. Look at the late Communist leader Deng Xiaoping of China, who shook up world history with his bold statement: “To be rich is glorious.” I agree!

Among the requisites to legitimate wealth creation — totally different from unexciting and shameful ill-gotten wealth via crime, nefarious political corruption or other shortcuts — are the habit of saving money and letting money work for us (not the other way around of just working for money forever), learning the uncomplicated basics of financial planning and having the unwavering personal desire to be rich.

Thanks to The Philippine STAR and the Philippines’ biggest homegrown life insurance giant, Insular Life, this column is once again starting our question-and-answer series on personal finance, life insurance and other related concerns to hopefully demystify certain ideas and help debunk wrong notions about money, investments and financial independence. This is a public-service endeavor to help educate all of us about money issues, how to gain the best insurance package, and how to become rich by making money work for us.

We thank Insular Life for sharing our advocacy to promote a national culture of savings to be inculcated among young people, entrepreneurs, professionals, housewives and others, either through traditional bank deposits, various types of life insurance, realty investments, and others. The Philippines has one of East Asia’s lowest per-capita savings rates; we should help change this!

Readers are welcome to e-mail any life insurance, personal finance, investment and other money-related questions to willsoonflourish@gmail.com or my Facebook account. We will then seek advice and answers from the top executives and experts of Insular Life every Monday up to Dec. 28.

Lack of Income Not Our #1 Problem, But Lack of Savings & Financial Planning

The late King of Pop Michael Jackson, talented Hollywood star Nicolas Cage (who is now US$8 million in debt), and the past experiences of our own superstar Nora Aunor are examples of people with so much income who still ended up financially broke. This means that the usual excuse people use about lack of income is not true. What we — ordinary people or even high-flying celebrities — badly need is the habit of saving, a basic understanding of financial planning and the need for us to focus on our net worth, not on our working incomes.

Why partner with a life insurer for financial planning advice, and why Insular Life?

My talented entrepreneur father lost his fortune, which was started by my immigrant great-great-grandfather, due to a bitter family squabble in the courts with his half-siblings and kin a few years before I was born. Dad died without any life insurance protection when I was only seven years old and my sister was six. He was a widower when he married our late mother, who was an elementary school teacher without a basic financial-planning background, so we were his second family left without economic security. His seven kids from his first marriage already had their own families and businesses.

Decades later, an overseas cousin would show me old letters of our late mom, and I read how her meager teacher’s pay every month was smaller than the monthly rental of the apartment in Quezon City where we used to live, so she supplemented her income by tutoring rich kids to assure us of a good education without any aid from others. I couldn’t forget when my kid sister needed an eye operation; Mom had to add to her tutoring jobs late at night in the home of a rich family to save up for my sister’s operation and we’d both worriedly wait late nights for her to come home — sometimes during typhoon season. If only there had been one hardworking life insurance agent who had sold my late dad a policy as part of financial planning, perhaps our late mother’s life would have been less difficult.

When my sister and I were in our early 20s, our hardworking and frugal mother became critically ill due to a heart problem without the benefit of any medical insurance. When she suffered strokes and became comatose for two and a half years, my sister and I decided to use up the 16 years’ worth of bank savings from her teacher’s wages and her extra income tutoring rich kids to provide her the best medical care.

I’m sure that the officer in the trust department of China Bank must have wondered what two kids were doing regularly withdrawing so much money. Our mother had the foresight to make both of us kids her co-signatories when she was still in good health. We hired midwives and nurses for 24-hour care, two personnel at any one time, and we converted the living room of our rented apartment into a mini-hospital room complete with electric generators. Whenever there were emergencies or her condition deteriorated, we’d call the ambulance to bring our mom to the hospital.

When Mom died two and a half years later, financially we were already in the negative after her last hospitalization. The last of her bank deposits were depleted and my monthly salary then was only equivalent to a few days’ worth of her medical bills in the intensive care unit.

Despite our unpaid medical bills, my younger sister and I were able to take our mom’s body out of the hospital because our paternal cousin, the famous cardiologist Dr. Dy Bun Yok, had given the hospital his personal guarantee. Up to now I still think that our lives would have been less difficult if a conscientious life insurance agent had sold our late mother a policy for medical insurance, plus another policy for life insurance protection when she was still well.

I do not consider myself rich yet, just financially independent. Throughout my career, first as an ordinary office employee for a realty firm, then as a real estate broker (because income is unlimited in sales) and now as a small realty entrepreneur and writer, as well as part-time college teacher, magazine editor and occasional private moneylender, I’ve personally bought a total of seven life insurance policies from three different companies. How come we so easily and instinctively insure cars, offices, homes and factory machineries but not the most important moneymaking machine, which is ourselves?

When I started earning briskly from realty sales, I took some risks with financial leverage using loans and investing in real estate. For my first three life policies, I was the one who called up three different life insurance agents to sell me a P10-million policy each, for a total of P30 million back then. I’m sure it’s rare even now for a client to call a life insurance agent to buy policies like we order pizza, because most people — even the most intelligent and business-savvy — usually have to be persuaded to buy life insurance. Not in my case. I’ve always believed that life insurance is essential for our peace of mind and for our loved ones.

Having lost both parents early, I’m keenly aware of the inevitability of death, the uncertain vagaries of fate and the evanescence of human life. Life insurance is very important as part of financial planning. In economically developed societies like Taiwan, Singapore, South Korea and the West, people paying life insurance premiums and adding new policies are as common as us paying our monthly electric or water bills.

Like Doctors or Banks, It Is Important To Choose a Life Insurer You Trust

I also went into life insurance selling a few years ago and attained the international distinction of the Million Dollar Round Table (MDRT) in several months. Thus, I have had the opportunity to study various life insurance firms up close and compare them to each other. Without any hesitation, I can vouch for the unimpeachable integrity, financial stability and enlightened corporate governance of Insular Life. Arguably they are the best life insurer in the Philippines.

It is also a testament to Insular Life’s excellent corporate management and financial stewardship that during the period of unprecedented global economic crisis in 2008, the firm had total assets of P57. 9 billion, generated revenues of P2.4 billion and posted a net income of P 2.1 billion.

Next year is a milestone for the Philippine life insurance industry because Insular Life celebrates its centennial — 100 years of outstanding public service as the first and biggest Filipino-owned life insurer in an industry where only two other bigger firms are Western-owned multinationals. Insular Life has been the trusted insurance company of many generations and it is to the credit of its leaders today that this institution continues to be a strong and reliable insurance company about to mark its 100th anniversary in November 2010.

We need to encourage everyone to become rich, to build a broad-based middle class of affluent people as the bedrock of a progressive, free enterprise economy and genuine political democracy. Nowadays I’m alarmed that even our pop culture, like the modern-day popular TV teleseryes and local movies, seem to wrongly romanticize and insidiously perpetuate poverty as acceptable or even suffering as noble, while demonizing the idea of being rich. There is nothing essentially or morally wrong with becoming rich, as long as the means are legitimate, legal and there is no distasteful extravagance or arrogance.

More than just political or socio-economic reforms, I believe we need a radical attitude and mindset change in Philippine society. We should spread the gospel of financial independence through savings, hard work, life insurance, a positive attitude, self-reliance, faith and discipline for a better, safer future. To be rich is not only glorious; it is our destiny, it is our birthright!  –Wilson Lee Flores (The Philippine Star)

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Any questions on personal finance, life insurance and other money concerns are welcome at willsoonflourish@gmail.com or my Facebook account.