Saturday, January 24, 2015

Insurance: Layman's Terms

This is in no way inspirational nor commercial. This is just me, talking. :)

I have always been skeptical about insurance plans because of the College Assurance Plan (CAP) pre-need educational plans issues years back (lots of Ss there). I know of some who had trouble paying their college tuition fees because CAP released their checks late, and some others who never got their checks at all. I just simply lost my trust. And when I took up Insurance classes, I realized that the insurance business is crazy, and I told myself I wouldn't venture into that UNLESS NECESSARY.

BUT necessary it is.

You see, just recently, I received an email stating that my insurance application has been approved. I am officially insured!

Why insure? What is insurance, anyway?

Imagine this: You have a seed. You give it to a farmer. The farmer will plant it in his garden. He will use the other supplies that has also been given to him by other people. He takes care of the plant. After some time, you run out of food. So what do you do? You go to the farmer and get your seed back. This time however, the seed is already a full-grown plant with fruits that you can eat. Go ahead and satisfy your hunger!

Okay, so maybe that's not the best comparison. But look at it this way: The farmer is the insurer - the insurance company. He will do anything to make your seed grow and reach its full potential so that if one day you'll need it, you won't only a the seed, but fruits as well.

Insurance is the pooling of risks. People will "pool" their money, otherwise known as premiums, with the end in mind that when the risk or loss they have insured themselves against takes place, they will be covered (more than the value of their premiums). This is possible because the insurer will use the premium payments in investments they deem profitable. So in a nutshell, that is basically it.

Why insure? RISK. Anything can happen. We will all die. We might get seriously sick or meet an accident. Good then if we live healthy until old age. In the event we die, WHO WILL PAY FOR ALL THE EXPENSES? What will happen to those we leave behind? Having an insurance (depends upon the type), will "secure" your death. Expenses will be covered. Beneficiaries will receive money. But if we don't die (yet), and decide to simply end the insurance contract, you get your premiums back plus the interest! Hello retirement fund!

Why not just deposit your money with the bank? Banks are still safe places to KEEP your money. But they don't provide you benefits when the risk or loss occurs. Interest is at a minimum (about 0.2%? Less tax) while insurance companies go as high as 27% in annual interest.

A lot could be said, I might elaborate some other time. For now, I think that's it. Just make sure you get the right insurance, one that fits your need and lifestyle. I got a life insurance. Simple and cheap with good benefits. But as my friend said, who would want to die? We're insuring ourselves for the future, not for our death. OKAY :)

Here's a list of the top 15 insurance companies in the Philippines last 2013. This is based on the company's net income. For the complete list, check out the Insurance Commission's website HERE.

Just make sure you trust your insurance company. Remember, this involves RISK. Everything involves risks. If you are not much of a risk-taker, consider other things. Perhaps hide your money under your pillow. The only risk involved is when somebody steals it.

Wednesday, January 7, 2015

Save those bills and coins!

Saving does not come naturally for me. Maybe because I wasn't trained.  I was only told to always have "emergency money". Totally different thing. So now, almost 30 (and still single, but that's beside the point), I am going to start my way towards seriously saving up for the future.

Don't get me wrong, I do save. But I also spend too much. I eat too much. I often clear up my savings and start again. This time, I'm ending the cycle!

Starting October last year, I saved up every 10-peso coin I could find. I was inspired by the idea that my classmate was able to buy herself a watch after a few months of saving these coins. I was even more inspired when I learned that my friend's brother was able to buy a Toyota Wigo just by saving 10-peso coins. Imagine, they brought pails and pails of it to the bank! True story. I'm not keen on saving up for a car using these coins. I just liked the idea. Since then, I have saved about P2000. Not bad. I kept them inside these cute empty Starbucks bottles (will probably write about it next time and share with you where some of the money went, hmph.)

Now, I'm thinking bigger. Why not save every P200-bill that I could find? Correction, "that I have"? (My mother has already hated me for rummaging through her coin purse every now and then looking for P10-coins.) I got the idea after browsing through Pinterest. There was this lady who saved up her $5 bills. She was able to buy a KitchenAid! And an HP Movie Set Collector's Edition! P200 bills aren't that easy to come by, so don't expect me buying that KitchenAid anytime soon. And besides! The goal is to save up FOR THE FUTURE (I need convincing this time. KitchenAid!).

In other news, today marks the start of my first workday. 7 might be my lucky number for the year then. Not too lucky though as I'm a minimum wager. But I'm not complaining! So hurray for sources of income!

Also, in other news: last night, I was arranging my things and I found money! As I've said I was told to keep emergency money so every now and then I get surprised by the money I find tucked in a bag or wallet pockets. This time however, the money was bigger than my usual emergency money. Made me think it wasn't mine.hehe Still, hooray!

Can't wait for payday! :)
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Sunday, January 4, 2015

Revolution to Independence


: a sudden, extreme, or complete change in the way people live, work, etc.

I've never been serious about my savings. I always plan on saving. I always remind myself to set aside a little extra for emergency use. I keep a piggy bank. I have a bank account. I. do. not. have. savings.

Sure, I can get what I want. I save up for things I want to buy. I don't have debts or money issues. It's just that, I am not financially independent, which is a totally different thing. I can never boast of a hefty bank account. Heck, my piggy bank is even empty right now! I do have bottles with coins in them, but still, that's not something I should be proud of. If I were living on my my own, chances are, I'd be starving to death in a couple of days. Sad but true.

I'm in my late 20's and I'm at that point in my life that I have come assessing my life decisions. What if something happens to me, who will support my younger brother's college (no I don't currently support him financially, and nope, he's not yet in college)? What if something happens to my parents, will their savings be enough to cover the expenses? Do they even have savings?

I was writing down my 2015 goals and noticed that a lot of it involved, at least, having to have money. And then it hit me: "money matters". Considering I'm currently unemployed, where do I get my funds from? How do I generate funds? I want the money to come from my own pocket, so some action needs to be done here.

So I decided to act. Of course, there's that part that I need to have a source of income, but that's a different story. My point right now is how to manage what I have, and how to optimize the money that I will soon be earning.

And because I don't always take things seriously, I have come up with this blog in order to chronicle my not-so-drastic-but-I-expect-it-to-be-extreme change in lifestyle (thus the REVOLUTION). I will always update, that way, I'll be able to force myself to make a progress report. Assuming there'd be progress, of course. But there MUST be PROGRESS. And THERE WILL BE. Crossing fingers. And toes. And everything else.

How will I be bulking up my savings? A job. A business. The stock market.

So join me in my soon to be struggles and (mis)adventures as I journey towards my financial independence. This is the revolution then, I suppose.

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