Monthly Archives: March 2016

How can we avoid irrational behavior towards finances?

Hacking your brain to make the best financial decision is not easy as it sounds. Every day we make thousands of decisions from what to buy, eat, dress or watch. Using behavioral economics to shape financial planning in the country is necessary in avoiding biases and intuition that lead to irrational decisions.  Here are the following recommendations in identifying and avoiding such costly mistakes.

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Mindfulness – Knowing yourself is the best way to start and observing how you make decisions will bring you to a higher level. If you are considering investing a large sum of money, or you would like to buy or sell your current stocks, it is highly recommended for you to step back, list the cost and benefit of having that decision. Evaluate and see for yourself the good and bad side of jumping into that decision in the long run.

 

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Be a visionary – Most people are currently suffering from myopia (near sightedness) but by thinking and seeing your life 10, 20, and 30 years from now, will give you an advantage. Seeing the lifestyle that you want and able to afford with a disciplined financial plan will help you to avoid expensive mistake and able to manage the risk involve. Compare that with the potential savings over time in your financial plan to help you stay aligned with it. The importance of it was also mentioned by Helen Keller when she told us “The only thing worse than being blind is having sight but no vision”.

 

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Discipline – Willingness to continue over time will put you to momentum. When you create and maintain an overall financial plan and stick to it no matter what happen, the result is a stronger muscle of willingness that’s helpful when a tougher situation arises such as resisting the temptation of buying that expensive bag that you love or to bail out during unpredictable times, knowing that a buy-and-hold strategy performs better over the long term than trying to time the market. At the same time, discipline also can mean knowing when to sell. Gains and losses may happen over time.

 

 

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Schedule it first –Doing nothing at all is often the easiest choice so having automatic savings and investing plan each month for important long term goals will save you so you can retire with dignity. For many, Myopians (near sighted people) they spend their money in different ways as fast as they can on short-term wants with nothing left or worse buried in debt.  Even investors who want to save for retirement or know they should rebalance their portfolios often fail to take action because they never put their plan in a calendar.

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Put it in writing – When emotion is up the logic goes down that’s the strategy of some investors work with advisors to set up a written investment strategy that includes scenarios and how they would act under those circumstances. This allows for flexibility within the parameters of a financial plan and helps avoid making decisions based on emotion. For example, the plan is like a playbook, it consist detail action to be taken if the market increased by 50% or went down by 25%. These game plans are not binding agreements but can provide meaningful ways if an investor begins to have uncertainty with his or her long-term strategy.

 

 

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Get an accountability partner – According to Charles Duhigg “human beings behave well if someone sees what they do, while we behave our worse when no one else seems around”. Our human tendencies tend to go back to our old habit of comfort zone. Doing mental accounting like disregarding savings for an out of country trip while having so much debt with credit card and high interest loans proves to be insane. Find a coach, a buddy or even a community that will help you watch out for your irrationality.

 

 

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David Isaiah Angway is a RFP and a financial consultant for IT-BPO-Banking, HealthCare Industry and Manpower Agencies. He is a conference speaker and was featured in ANC On the money, Bloomberg TV Philippines. He is also columnist at BusinessMirror, Rappler, and MoneySense magazine. He is a licensed nurse and a former Senior Fraud Specialist of the largest bank in the world, JP Morgan Chase & Co.

He is the CEO and founder of WinLongTerm Financial Consultancy, helping young urban and educated millennial (Gen Y). It sets and achieves their long-term financial goals by empowering them through behavioral finance.

For more information and concerns subscribe to winlongterm.com Facebook page or contact me at david@winlongterm.com, here’s also my mobile number 0925-787-7796

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Financial Fitness Forum 2016: Developing the financial habits that will last.

 

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I want to thank God for the talent he gave in the first place, Sir Henry Ong for trusting and the RFP institute for giving an opportunity to speak in front of everyone. I can see my professors, clients, mentors, colleagues back then who are here today. Thank you so much for your commitment to personal growth even it’s Saturday.

My question is how would you know the difference between a poor, middle class and rich?

Anu raw binabasa ng mga Mahihirap?

Poor – Tabloid

Middle class – Event Magazine

Rich – Business Books

This is a classic example that your habit can transform who you are.

Are you the kind of person who keeps on having issue with applying everything that you know in finances. Did you promise yourself this year that you will experience growth in your savings or investing but still nothing is happening? Have you bought a certain financial products in the market recently and having a hard time paying for it?

According to a recent study done in the United States, 94% of the attendees today will not change their behavior after the conference and 6% will only be successful to apply what they’ve learned from this program today.  You are learning a lot of stuff about finance since 10am so you are probably overwhelmed with the information and the big question is how I can actively do it. I can simply conclude that habits will either make you a winner or a big loser.  I’ll tell you how.

 

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The first key to change the habit is to know your identity and your tendencies.   You need to understand who you are as a person and what your identity really is. If you believe that you are a middle class your tendency is to act like a middle class but If you believe that you are a rich person. You start talking and acting like a rich. I would like to show you the big distinction.

The middle class climb the corporate ladder, the rich own the ladder

The middle class are friends with everyone, the rich choose wisely

The middle class work to earn, the rich work to learn

The middle class focus on saving, the rich focus on earning

The middle class are emotional with money, the rich are logical

The middle class believe in hard work, the rich believe in leverage

 

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Last 2009 when I got scammed, I was just a fresh graduate from college, with a medical degree, got low financial quotient back then and No one taught me about personal finance.  I was not trained to invest my money. So what happened AFTER that between 2009 to 2016?  That’s what I would like to share it with you.

Aerial of Ricky Hatton down during the count by the referee after a knockout by Manny Pacquiao to decide the 2009 IBO Light Welterweight Title at MGM Grand Garden Arena. Las Vegas, Nevada 5/2/2009 (Image # 5028 )

Aerial of Ricky Hatton down during the count by the referee after a knockout by Manny Pacquiao to decide the 2009 IBO Light Welterweight Title at MGM Grand Garden Arena.
Las Vegas, Nevada 5/2/2009
(Image # 5028 )

This was Ricky Hatton (Rebel) being knocked down by Manny Pacquiao on the 2nd round of their fight way back 2009. This was my situation back then, I got scammed worth 50,000.  I was prideful that time, alam mo yun, you think you know everything, but reality was losing that money was just a big blown on my ego,It knocked me off right on my head. A couple of months after  I got scammed I became reckless ,distraught ,disappointed and dismayed to the point that I felt I have no one to turn to ,in other words I am hopeless that I will ever regain what was lost in me.

 

This is my beautiful daughter who questions everything before she obeys. (Questioner)  2011,I was like her. I started asking questions because of fear of having bad investment again  but it did not mean that I am critical about it but I just wanted to learn more to be more responsible with my finances.

 

This was the Golden state Warriors when they won the 2015 NBA Championships. I consider myself that I’m in this state right now because of a working system but there’s still so much to learn.maxresdefault

The pictures that I presented awhile ago have something in common.  These are the people who represent us every single day.

According to the research done by Gretchen Rubin, we got Four Tendencies and that’s Upholder, Questioner, Obliger and Rebel.

So let us identify these 4 tendencies.

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Upholder, are the people who love to schedule everything They love to create rules for themselves; they impose it and exercise self discipline. They can adapt asap with no more debate if they write it down that means it should be done. Only few people are these.

Questioner, these are the people who keeps on asking whether an investment program makes a lot of sense or will that help them, let say will this seminar increase my money on their pocket or is doing a budget makes a lot of sense. If it is, they will comply. If not, they won’t bother. Do you know someone like that?  They have normal tendency of being skeptic but that’s their strongest ally.

Obliger they promise that they will start exercising but end up eating a lot. Some of them know that when pay day comes, they promise to start investing; they start pretty good but end up not making it for a long run. They are having issues making this investing a reality. They’re trying to figure out the answer on what to do, and they do it themselves but still not working.

Rebel tendencies have different worldview. Whatever you suggest to them they won’t accept it.  The mere fact that they heard financial fitness forum they become allergic to it and don’t want to be bind. This happened to Ricky Hatton when he was knocked down because no matter what his coach told him, he has his own game plan.

Build a system

These 4 tendencies have already an existing habits..

If you want to develop the habits that will last remember the habit loop, you need to know the cue routine and reward.

For example if there’s a seminar like this, how many of you will find time to check your schedule first, how much is the fee, check the cost benefit of the seminar then make a decision. It is a routine.

Cue: Let say pay day or an extra money coming in, you already have the money, what do you do? Routine and Reward happens next.

 

This is the habit loop. 

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Upholder will immediately do the following budget, allocate, check his online banking .  Automatically they Put all the budget in a paper or in excel file. Check the statistics of their investment every day.  the reward: Satisfaction

Questioner will think whether it makes sense to have a budget or do any investment allocation: If it makes sense then he will do it, if not, then forget about it. The reward is No Stress.

Obliger, should I go and have budget to save money, I think I won’t be able to sustain it too, he will do it for the next 2-3 months then after that he’s done. Many people fall into this. That’s why same thing goes with finances the more na you are with people who got discipline, you also adapt to it.

Rebel. Who cares.  I will do whatever I want with my money, The Reward. No stress and no binding contract, he’s satisfied with that.

Willpower

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From the habits we develop our Willpower to control ourselves. Willpower is like a muscle the more you use it, the more na napapagod ito as the days goes on.

That’s why it would be better for you If you have the option to make financial decisions earlier in the day rather than later, do it – you’ll be more likely to make the smarter decision. There’s a recent study in the UK that says the reason why many people are poor is because they don’t prioritize making financial decisions earlier in the day.

If you want to increase mindfulness to achieve lasting habits you need to improve your thinking.

Schedule – When you schedule things it simply gets done Habits grow strongest and fastest when they’re repeated in a more predictable ways.

You get the sense of accomplishment when you cross out that one activity such as Paying for your insurance on time or do a peso- cost averaging with your investments. It also builds momentum.  When you cross that to do list, I saved funds, I also invested today, or I sold my stock. This eliminates the procrastination. It also helps to say no to trivial things.

For example,

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This is the closet of facebook founder Mark Zuckerberg.If you notice,he has a habit of wearing the same thing everyday. Why? He would like to lessen the decision fatigue.  Same thing goes with your finances, when you schedule it, you eliminate the question whether I need to save or not, invest or not, pay my insurance or not.

No debate anymore.

The power of community

 

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These are the people of RFP. As you can see I am the youngest.

Let me tell you a story how RFP change my perception towards finances, it opened up my brain that there’s so much more to learn. I am not ashamed to tell everyone this because I’m a product of  175 yrs of experience of my professors. Imagine they’re 7 people who got minimum of 25 years of experience. It’s very hard to do it in my own way so I use leverage of other people’s experience to get ahead in the game. It’s a fast track movement. You need to stop thinking like a middle class if you want to be rich. By simply attending RFP this is the price but this is the value that you will get.

Successful story about habits IKEA billionaire

 

ingvar kamprad habit

Ingvar Kamprad is the founder of Ikea a Swedish company and and his net worth is an estimated $71.8 billion and pretty much can buy whatever he wants. But he’s still buying 2nd hand clothes till now. Again it speaks about his identity. He thinks middle class own things, while rich people exercise frugality.

You cannot remove habits, you can only replace them with a better one.  The loopholes are excuses. Change your habits and it will change your life

 

Your finances will be in a bad situationif you don't stop chilling with the wrong people (17)

 

 

David Isaiah Angway is a RFP and a financial consultant for IT-BPO-Banking, HealthCare Industry and Manpower Agencies. He is a conference speaker and was featured in ANC On the money, Bloomberg TV Philippines. He is also columnist at BusinessMirror, Rappler, and MoneySense magazine. He is a licensed nurse and a former Senior Fraud Specialist of the largest bank in the world, JP Morgan Chase & Co.

He is the CEO and founder of WinLongTerm Financial Consultancy, helping young urban and educated millennial (Gen Y). It sets and achieves their long-term financial goals by empowering them through behavioral finance.

For more information and concerns subscribe to winlongterm.com Facebook page or contact me at david@winlongterm.com, here’s also my mobile number 0925-787-7796

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Men who built America –5 characteristics of the most powerful banker J.P. Morgan

Morgan

 

He is the person who inspired the game monopoly and inspired the modern system for corporate management. The character of this person was a go getter. He got money and power but not only that. These are the amazing characteristics that I think everyone can emulate from the king of banking industry.

 

Defiant – When he was young, his father trained him too hard. All his actions are being watch; he had this crisis in him where he wants to create his identity that’s far from his father. A great opportunity open up when he teamed up with a brilliant Thomas Edison, they created a partnership that brought Direct current in America. His father thought that investing to that invisible energy is futile and a waste of time.  Even his dad was disappointed he can see that electricity will be the future. Many people won’t see the vision that you got because God never gave those to them.

 

Maximizer – As a banker, he managed the risks, all those companies that are struggling back then were being consolidated to make sure that it can still survive and prevent filing of bankruptcy. This innovative system is being follow till now and named it Morganization in honor of him. I also think that Manny Pangilinan group of companies are doing the same thing today, wherein they are the savior of those great companies back then and to avoid further fall, they’ll get into the scene and restructure it.

 

Be a competitor – He competes like Rockefeller and Andrew Carnegie but he uses his power, influence, money to get what he wants. He’s determination to get the unthinkable gives him that level of mentality.  Be a go getter and not just a planner.

 

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Influencer – He’s also famous in Wall Street, America recently had gone to an economic depression and the people know exactly who to go to get forecasting. He’s an expert so everyone listens to him when He speaks.

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Your finances will be in a bad situationif you don't stop chilling with the wrong people (17)

 

David Isaiah Angway is a RFP and a financial consultant for IT-BPO-Banking, HealthCare Industry and Manpower Agencies. He is a conference speaker and was featured in ANC On the money, Bloomberg TV Philippines. He is also columnist at BusinessMirror, Rappler, and MoneySense magazine. He is a licensed nurse and a former Senior Fraud Specialist of the largest bank in the world, JP Morgan Chase & Co.

He is the CEO and founder of WinLongTerm Financial Consultancy, helping young urban and educated millennial (Gen Y). It sets and achieves their long-term financial goals by empowering them through behavioral finance.

For more information and concerns subscribe to winlongterm.com Facebook page or contact me at david@winlongterm.com, here’s also my mobile number 0925-787-7796

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Men who built America – The power of Andrew Carnegie’s Characteristics as a Steel Magnate

03andrew-carnegie

Men who built america picture

He was young when he arrived in United States of America, from nobody he turned himself into somebody and saw the value that he can give to the world and maximized everything about it. Seeing leaders in the industry from Rockefeller to Vanderbilt, he needed to level up his character to achieve necessary things and these are my observations at the life of the biggest steel magnate of all time.

 

An apprentice turned titans – he owed most of his learning from his mentor, Thom Scott and would like to replicate what he had. From the time he’s a little boy, Scott taught him a lot of things. Now that he has his own venture he understands the business process and competition that will help him outlast his rivals. The value of leadership had such a big impact to him and he did a phenomenal job.

 

Risk taker – No risk means no reward at all. Seeing the current situation in America and the railway system, Carnegie saw the potential bridge that will help his new business to thrive; a long mile bridge that will outlast the test of the current of the Mississippi river will give him an advantage and show to the world that Steel will become huge in the future.

 

Smart – His willingness to rise from the top was more of his passion to outduel Rockefeller. He tried to create a profitable company but cannot make things happen all the time so he hired a very strict person to oversee the company.

 

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The giver – Carnegie’s wealth came from the people who worked for him. He put a product and created a process but he realized what the purpose of massive wealth if he will die rich. He is not a popular capitalist compare to his rivals because he set the standards of telling everyone that if you die rich, you are a disgrace. Knowing that, he started giving back to the masses and funded a lot of nonprofit organizations. Libraries are the best contribution of Carnegie to the modern society, there’s more than 2500 Carnegie hall in the United States. He’s empowering the next generation to use these places to self educate themselves.

 

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Your finances will be in a bad situationif you don't stop chilling with the wrong people (17)

David Isaiah Angway is a RFP and a financial consultant for IT-BPO-Banking, HealthCare Industry and Manpower Agencies. He is a conference speaker and was featured in ANC On the money, Bloomberg TV Philippines. He is also columnist at BusinessMirror, Rappler, and MoneySense magazine. He is a licensed nurse and a former Senior Fraud Specialist of the largest bank in the world, JP Morgan Chase & Co.

He is the CEO and founder of WinLongTerm Financial Consultancy, helping young urban and educated millennial (Gen Y). It sets and achieves their long-term financial goals by empowering them through behavioral finance.

For more information and concerns subscribe to winlongterm.com Facebook page or contact me at david@winlongterm.com, here’s also my mobile number 0925-787-7796

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