I have an acquaintance who has been an active investor in online multi-level marketing and other paid-to-click schemes. Indeed he was making a lot of money from his ventures.
But there is one problem. Whenever he earns thousands, he spends them all on things that are on his wishlists. Monthly wishlists.
Recently, Mr. Acquaintance started to lose his edge in gaining more recruits for his online businesses. He could not earn as much as what he was earning a year or so ago. The items that are on his monthly wishlists have started to just remain as wishes.
I advised him to learn to save some for an emergency fund and then invest some more in other financial instruments like stocks or mutual funds for his long-term needs. Even at that point when he has little left on his hand, he said he’s okay and can still pull it off.
“Pare, Can I Borrow Money for My Son’s Birthday?“
One day, Mr. Acquaintance approached me and wanted to borrow money for his son’s upcoming birthday. He wanted to celebrate it in one of the famous fastfood chains for children in the Philippines.
That will be Php25,000, please?
That being said, I gently declined his request and told him that I just have enough for daily needs. I did not mention anymore about saving and investing.
Here are the problems with Mr. Acquaintance:
1. He did not have any long-term financial goals.
2. He believed that he can rely solely on one type business for his family’s living expenses. He did not diversify his money.
3. He did not save money.
4. He did not cut his bad spending habits and borrowing. He would even borrow money just to satisfy their wants and lavishness.
5. He continuously refuses to learn how to invest for his and his family’s future through various financial instruments like stocks, mutual funds, bonds, or even real estate.
If you were in my position, would you lend him money? What would be your advice to Mr. Acquaintance? You may list them down on the comment section below.
May you all practice a frugal yet fruitful living this 2013!
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