In my previous article, I talked about “The Most Profitable Investment for Entrepreneurs”. If you haven’t read that article yet, please read part 13 of the series and sign up for the Wealth-plan so I can email you that and the previous articles in the proper order.

In this article, I want to focus on the “One Thing” that anybody should figure out early in life if they want to succeed and more importantly, ENJOY life. If you can answer this one question of mine definitively, and without a shadow of a doubt, then email it to me at markso@wealthflowproject.com Ready? Here’s the question:

“What Are You Great At?”

It is a simple question really but a very hard one to answer for a lot of people. In fact, you’re probably thinking right now what to answer, or simply say “I don’t know”. Others, may find themselves thinking of several things they are great at because they are multi-talented. I just need you to give me 1 (one) thing that you are great at and nothing more.

When I was a kid, I had a pretty clear picture of what I wanted to be. Some kids wanted to be doctors, others astronauts, well I wanted to be an Engineer, specifically a Computer Engineer, why? Because it sounded totally cool and awesome (hey, I was a kid after all right). And so, when it was time to go to college, naturally I took up Electronics and Communications Engineering (E.C.E) which is not just Computer Engineering but Communications Engineering as well (Broadcast, Telecoms, etc.) in other words, I went after what I wanted to be. But, it wasn’t what I was great at.

While taking the course, which was one of the ‘harder’ courses back in my day, and brilliant as I was, I never became the TOP student in my batch, that post was taken by a guy who had a perfect grade point average (GPA) of 4.0 and his name was “Mr. Lim”. In other words, although I knew I wanted to be an Engineer, and no matter how hard I studied and tried, I could never beat Mr. Lim, in fact there were at least 29 people who had better GPA’s than me when we graduated. I was of course number 30 in the top 30 to graduate the course. This is not to say I was not as smart as the rest, but rather because I did not answer back then the one question I am asking you now.

So let’s continue. After I graduated, of course I went looking for a job that needed ECEs. I applied and was rejected from a lot of big multinationals because my GPA was not high enough, but I did land a job eventually, in fact, I created my own job in Islacom (the article is called “The True Story of How I Created My First Job” which can be found in my blog wealthflowproject.com) then I moved to an IT company, then finally a huge Multinational Telecoms company. But even though the money was great, I was miserable because I wasn’t really doing what I was great at doing. In fact, and I can say this now with all honesty, I wasn’t doing it because I was great at being an Engineer, I was doing it because of the money, and again in all honesty, I have to admit, I sucked as an Engineer!

“Doing what you are not great at, distracts you from who you are really meant to be!”

But what I was great at, what I realized much later on in life, was that I was great at “Communicating” and getting through to people. I finished top 30 in my ECE class because I “talked” my way to passing my Thesis. I convinced the panelists why they should pass me, which they did, not because my thesis was excellent, but rather because my words were. I created my own job at Islacom because I “talked” my way to getting the head of the mobile division to hire me, not because I was a top notch engineer, but because I was a top notch “communicator”, selling my number one product –me. How I wish I had seen it already back then, but then again, like most people, I did not because as I said, My next job, made me miserable. Because, and let me say it again, doing what you are not great at, distracts you from who you are really meant to be.

So when the opportunity to go full time into business came my way, I went for it. My first business venture, did not do so well, and in fact almost ruined me because that business did not allow me to do what I was great at doing. The next business was an entirely different story altogether, for that business was Businessmaker Academy. I didn’t realize it back then, but I do now, because this business has flourished and continues to do so. Why? Because, at Businessmaker Academy, I do what I do best, here I do what I am Great at doing every single day. Today, together with our top notch resource speakers, we have taught, inspired, trained, and developed more than 20,000 alumni.

So my dear reader, if you want to succeed and ENJOY your life earlier on, take my advice, figure out what you are great at, then be the best at it.

Author Box:
Mark So is a fervent businessman, Investor and educator. He is the Chairman and CEO of Businessmaker Academy—a business, finance and corporate training center. He is the founder and Chief Forex Trainer of Forex Club Asia, A Trading club of Forex Traders across Asia. He is also the Founder and Chief Trainer of the Philippine Franchise Institute which specializes in training and growing existing Franchise businesses. Mark, together with his loving wife also created wealthflowproject.com a website dedicated to teaching people how to make money run after you. A sought after speaker for business, investing, You may email your comments and questions to: markso@wealthflowproject.com or call the office at 6874445 / 6873416 / 6874645 for a schedule of his seminars

In my previous article, I talked about the 3 things to consider before investing in ‘assets’. If you haven’t read that article yet, please check out part 12 of this article series.

In this article, I want to focus once more on Entrepreneurs and talk about what the most profitable investment is for Entrepreneurs.

 What is the most profitable investment for Entrepreneurs?

So let me give you the answer now. The most profitable investment of any entrepreneur is PEOPLE. Yes, you read that correctly, it is not product, it is not brand, it is not real estate, or stocks, or any other investment class you might think of. It is just one thing: PEOPLE.

Lets break it down:

Now in the world of ‘business making’, PEOPLE do not just refer to your employees. When I say PEOPLE, I mean 2 very big groups: 1) CUSTOMERS and 2) EVERYONE ELSE WHO WORK WITH AND FOR YOUR BUSINESS. Needless to say, and at the risk of ‘mastering the obvious’, CUSTOMERS are profitable investments.

Why should you regard customers as investments?

Well, most businesses regard customers as simply ‘people who buy stuff from you’, but successful businesses think of customers as ‘Investments’. Let me explain this further to add context to what I’m saying — every successful business big or small who ‘invest’ in customers are the businesses that make an effort to convert customers into ‘clients’. And clients are repeat customers or ‘people who buy stuff from you over and over again’. In tagalog, pag bumili ang isang customer, ang negosyong marunong mag-invest sa customer ay ginagawang ‘suki’ ang customer.

Now, as an Entrepreneur, if you can successfully do that, then you will realize, exactly how profitable investing in a customer really is. But more than just repeat sales, a more profitable result in investing in customers (if you do it right that is) is the positive word of mouth that your clients will give you and your business which in turn produces more customers for the business to invest in once more.

How do you invest in ‘Everyone Else’?

Well, first off, lets break down further who ‘Everyone Else’ is shall we. 1) Suppliers. 2) Partners, and of course, 3) Employees

Investing in your Suppliers

Never take your suppliers for granted nor should you treat them badly. Great and reliable suppliers are the result of ALWAYS paying them the right amount without unnecessary delays. Investing in your suppliers is about treating them professionally, treating them fairly and treating them with respect.  In the end, if and when you are in a bind, and you have invested in the relationship with any and all of your suppliers chances are, they will be more than willing to help you by giving you an extra discount, extending terms of payments, or in whatever way they can.

Investing in your Partners

Partners whether investors, creditors, sales affiliates, and any other organization that leads to either more capital or more customers is of course another thing any Entrepreneur has to invest in. The real trick with investing in your partners is that you as the entrepreneur have to make money for them, and, always be the first to act in their best interest. If you are successful here, you will have partners that would be more than willing to produce profits for you as well.

Investing in your Employees

Now you may be thinking of the usual things that you hear most people talk about, hire very good people for your business. Give great benefits, a career path, and other perks. While that’s all good and fine, investing in your staff and employees are not just those. In fact, there is one thing that life has taught me about this topic, it is this, all of the above won’t matter if you do not first of all invest your own time to teach, guide, lead, manage (discipline) and most of all RECOGNIZE your employees properly.

Now if you are able to invest in your employees successfully, this leads to a happier work environment, a more efficient operation, and of course more customers and clients that ultimately produce more profits.

But that is not the only benefit proper investing in employees do. When your employees start taking charge and starts to truly care for your business (and even you), It gives you, the Entrepreneur a commodity more valuable than money, which is MORE TIME. More time to either work on expanding the business, or more time to spend with family and loved ones.

So, remember, if you are starting or are already in business, the most profitable investment you should ever make is to invest in your PEOPLE.

Author Box:

Mark So is a fervent businessman, Investor and educator.  He is the Chairman and CEO of Businessmaker Academy—a business, finance and corporate training center.  He is the founder and Chief Forex Trainer of Forex Club Asia, A Trading club of Forex Traders across Asia. He is also the Founder and Chief Trainer of the Philippine Franchise Institute which specializes in training and growing existing Franchise businesses.  Mark, together with his loving wife also created wealthflowproject.com a website dedicated to teaching people how to make money run after you. A sought after speaker for business, investing, You may email your comments and questions to: markso@wealthflowproject.com or call the office at 6874445 / 6873416 / 6874645 for a schedule of his seminars

In my previous article, I talked about Step1: Making Money, and Step 2: Managing Money. If you haven’t read that article yet, please read part 11 of the series and sign up for the Wealthplan so I can email you that and the previous articles in the proper order from the very beginning.

In this article, I complete the Wealth-Flow Blue Print Step 3: Investing Money. Here’s the diagram again for easy reference.

Step 3: Investing Money:

Why do I need to invest in the first place?

Because we are not getting any younger. And when you get older, you will not be able to work as hard as you used to. When that time comes you must have a means to have money still flowing in to enjoy your days without having to worry about money, and without needing to work so hard anymore. That is the purpose of investing.

What is investing?

Investing is basically buying an ‘Asset’ with your money. And an asset can be anything that produces more money for you immediately (Short term) or after a while (Long term). Now although an ‘Asset’ can be a business like a restaurant, a retail shop, etc. in my view they are different from Investments. Investing for me is being able to make money without customers or staff, the 2 critical ingredients in any business. My definition of Investing is being able to make money with 2 different ingredients: money and experience. For more details on this, search this blog for the article “The difference between Businesses and Investments”

Now before Investing in anything, I would recommend that you are already doing a good job with Making Money and Managing Money (Steps1&2 of the Wealth-Flow blue print). If you are still struggling with the first 2 steps, then you may want to hold off Investing first.

Why you ask? Because investing money requires 2 critical things: 1.) Money that you can afford to lose (Risk Capital) and 2.) Investing Experience. Every successful investor starts with zero experience, which means when you start investing, you will make mistakes, mistakes that will cost you money. In exchange for these mistakes, you will gain experience and to gain experience, you will need a steady source of income and a practical head to manage the losses.

Now, investing is not all about losing money, of course the objective of investing is to make money, however, and remember this — an amateur investor will look at potential profits and  will not immediately understand and appreciate the risks involved in investing. Many times, people who work hard and sacrifice a lot to save some money put majority if not all of it into an ‘Investment’ only to get completely wiped out. So my goal for you is to avoid this catastrophe by asking simple but critical questions that I use myself

The 3 things to consider before investing money:

1. “Can I afford to lose the money if the investment does not work?”

This is the first and foremost question that you have to answer. If the answer is ‘Yes’ then move to the next question, but if the answer is ‘No’ then simply move on to another possible investment altogether.

2. “Do you understand what you are getting into?”

Now the second thing to think about before you get into an investment is if you understand how the ‘Investment’ will make money for you. Warren Buffet, considered to be one of the greatest investors of our time, says it very simply, “don’t invest in anything you don’t understand”. This is the reason why even though he is a very close friend to Bill Gates, he (Warren) has not invested a single cent in Microsoft. The reason? He doesn’t understand the business well enough.

3. “How long will the Investment take to produce a result one way or another?”

The third and final thing to consider before investing is the time it will take for you to make or lose money. Not a lot of people realize that ‘time’ is critical in any investment that you make. Lets say for example, you invested in something that will give you a 150% return in 10 years. Would that be a good investment? You are probably calculating in your head right now that that would translate to 15% per year which is not so bad considering the bank will give you a lot less than that right? You see, you just missed the critical element of the investment proposal. A lot of people would do the same thing you just did, look first at the potential return of 150% what is important in any Investment is the speed of the result, in this case 10 years.

Is it possible that after 10 years, you do not get the 150% return? Yes.

Is it possible that after 10 years, your investment could be gone? Yes.

If and when that happens, what did you lose? Not just money, but also 10 years of your life that you will never get back.

So before entering into any ‘Investment’ remember what I shared in this article, answer the 3 questions above and you will gain your experience faster and lose less money in the process.

Do leave a comment, I would love to hear from you!

Author Box:

Mark So is a fervent businessman, Investor and educator.  He is the Chairman and CEO of Businessmaker Academy—a business, finance and corporate training center.  He is the founder and Chief Forex Trainer of Forex Club Asia, A Trading club of Forex Traders across Asia. He is also the Founder and Chief Trainer of the Philippine Franchise Institute which specializes in training and growing existing Franchise businesses.  Mark, together with his loving wife also created wealthflowproject.com a website dedicated to teaching people how to make money run after you. A sought after speaker for business, investing, You may email your comments and questions to: markso@wealthflowproject.com or call the office at 6874445 / 6873416 / 6874645 for a schedule of his seminars

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For me and Jhoanna, wealth accumulation is a 3 step process and if we were to diagram it, it would look like this

Step 1: Make the Money

Step 2: Manage the Money

Step 3: Invest the Money

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If done right, the 3 steps that I just mentioned become a repeating positive wealth flow cycle!

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Step 1: Make the Money:

Now, lets get into a little more detail. To make money, the most common ways are 1.) Have a great career or 2.) Produce successful businesses. Although investing is a 3rd way to make money, it does not belong in step 1. This is because the premise of investing is that you need to have some money to invest already and step 1 of the blue print assumes you have no money to begin with, but not to worry, if investing is your thing, I’ll be talking about investments in step 3.

Business or Career?

A lot of people believe that to make lots of money you have to have a business of your own. Not necessarily true, in fact, and speaking from experience, chances are you’d make more money in one year if you have a good paying job compared to the first year of a traditional business start-up.

Now, I am not discouraging those of you who want to start a business. In fact, that is one of the many great things we teach at our Training Center at Businessmaker Academy. A business if started and nurtured properly will not just give you great cash-flow, but also a lot more control over your time. If you feel that starting a business is your calling, then by all means go for it. In fact, if you really wanted to, you can start your own business with ZERO capital. If you’d like to learn more about that then go here now

On the other hand, if you have a good job right now, and you are happy with it, then listen to my advice. KEEP IT AS LONG AS YOU CAN. Because the money that you make, which may not be as big as you would like is still money coming in every month. And if there is one thing I’ve learned from my wife, it is not about how much you make but how you manage that money when you get it. If you play your cards right, excelling in a career that you choose can actually lead you to big money as well. However be aware that not all industries will pay the same. There are industries that are higher paying than others. An example of high paying industries would be Telecoms, Information Technology, etc. So if you want to excel in a career, choose wisely first, learn how to move up the ladder quickly and be the best in whatever career you choose.

So remember, making money can be through a business or a career.

Step 2: Manage the Money.

Now if you look at the entire diagram again. There are essentially 6 areas of money management and these are:

1. Earning

2. Spending

3. Saving

4. Investing

5. Protecting

6. Giving

We just talked about earning the money in the first part of this article and so the next step is to manage it. Meaning, how do you spend your money, save your money, Invest your money, And give your money to those who need it the moment you earn it.

Spending

When it comes to spending, we all have expenses, and a lot of people who attempt to manage their money end up doing what we hear so many people say: spend less than what you earn, or the common phrase: live below your means. Although a lot of people believe this as gospel, I want to say that is not exactly true, at least, not if you want to feel deprived and miserable. At wealthflowproject.com, there is a 3 part article series called ‘Money Management Simplified’. I would encourage you to go to that site, and sign up for the ‘wealthplan’ so I can email it to you immediately afterwards so that I can explain in greater detail on how me and my wife spend without feeling deprived and miserable.

Saving

When it comes to Saving, yes, definitely you should BUT not for the purpose that everybody thinks it is for. We were told to save in the old days to have enough money to be able to retire and stop working. That is not what savings are for, you do not save to be rich and be able to retire, you save so that you have some cash tucked away in case something goes wrong with your career, your business, or your investments. In other words, your savings is your ‘fall-back’ in case something catastrophic happens to you or your family.

Protecting

When you get into extra money, the leeches will come. Money Leeches as I’d like to call them are the People, institutions, or “Cosmically uncanny” situations that just happen to show up at the very exact moment you come into some money. Sound familiar? Think back…Do you remember the time that you got that P5,000 bonus from your job, or a sideline or unexpected business from a client? Who called you or showed up at your doorstep needing urgent help or “who just happened to drop by” that very same week needing exactly P5,000? One very overlooked part of money management is to PROTECT your money from these situations. I have a dedicated article about Money leeches and I suggest that you read that to get a step by step plan to start protecting your money and yourself immediately.

Giving

When it comes to Giving, yes, be generous, BUT you should manage your generosity wisely. I believe in Tithing, but I do not believe that it has to be 10% of whatever you make. The way, my wife and I do it is to be generous with some cash and with a LOT in kind. By doing so, our giving goes well beyond the 10% value. Again, I discuss this at wealthflowproject.com go there now and sign up for the wealthplan and you should receive those articles as well.

Which now brings us to Investing. Unfortunately, you will have to wait and stay tuned for the next article where I talk about investing i a lot more detail. In the meantime, I hope this article gives you a snapshot of how wealth accumulation is done. All the best to you and see you at wealthflowproject.com

Author Box:

Mark So is a fervent businessman, Investor and educator.  He is the Chairman and CEO of Businessmaker Academy—a business, finance and corporate training center.  He is the founder and Chief Forex Trainer of Forex Club Asia, A Trading club of Forex Traders across Asia. He is also the Founder and Chief Trainer of the Philippine Franchise Institute which specializes in training and growing existing Franchise businesses.  Mark, together with his loving wife also created wealthflowproject.com a website dedicated to teaching people how to make money run after you. A sought after speaker for business, investing, You may email your comments and questions to: markso@wealthflowproject.com or call the office at 6874445 / 6873416 / 6874645 for a schedule of his seminars

One of the more important considerations an entrepreneur has to make before starting a new business is the nature of the business’ cash-flow.

What is Cash-flow?

But first, let me take a step back and explain in simple terms what cash-flow really is. Cash-flow is about cash coming in, cash going out, and how much cash you have in the bank. In my previous article series titled Money Management Simplified parts 1 to 3, I talked extensively about cash flow, and explained it by using a cup of water. if you haven’t read that yet, please go to www.wealthflowproject.com and read it there.

Negative Cash-flow businesses

Now, a Negative cash-flow business is a business that has this characteristic: cash goes out first, money in the bank goes down, and then, hopefully, cash comes in.

So lets say you want to open a coffee shop, because almost everyone thinks they want to, you should first understand that that is automatically a “negative” cash-flow business. You will have to get a place to put up the shop (cash out), buy kitchen equipment (cash out), get tables and chairs for customers (cash out), stock shelves with supplies (cash out) etc. And so, your cash in the bank goes down, you pray hard that the coffee shop will produce money, you open shop and then and only then will some cash come in — depending of course on several factors still like location, marketing efforts, pricing, etc.

Does this sound familiar to you? Of course it does because almost all businesses, not just coffee shops operate this way, in a “negative” cash-flow business way.

So what do you think is the risk involved in a “negative” cash-flow business model? Without mentioning numbers, the risk is huge and is one of the reasons why a lot of businesses don’t make it.

But you see, not a lot of people notice, pay attention, or understand business cash-flow, the first thing people think about when they start a business is that they just want to have a coffee shop, or a restaurant, or a food cart, or a laundry shop because of their likes, their skill set, or business trends start taking over. And before they know it, they’ve plunked in a big chunk of their savings, or took out a loan to produce the business, and once most of the money has been spent (invested) they find themselves praying hard that their risk will pay off.

Positive Cash-flow businesses

Now lets talk about “positive” cash flow businesses. A positive cash-flow business operates this way: cash comes in first, money in the bank goes up, then cash goes out.

So here’s one of many, many examples of a “positive” cash-flow business. Lets say you want to be in the Real-Estate business buying and selling properties but instead of buying property with your own money, you just refer people that also want to buy properties to your favorite broker. Of course you make a deal with your broker first that you get a referral fee for every successful sale the broker makes off of your referrals. Now, depending on how you advertise and market yourself, there is virtually no cash out, and when and if your broker closes the deal for you, you get a referral fee — Cash In.

Another example of a “positive” cash-flow business would be to get into the party planning (events management) business. You meet with the client to make a presentation on what the client wants for their event, if they like it, they hire you, and give you a down payment of 50% or even more (Cash In) you use that down payment to mobilize and make down payments to other suppliers (Cash out) and of course a week before the event itself, you get the full payment and with it comes your profit (Cash In).

Businesses with “positive” cash-flow not just removes cash flow problems but also removes risk immediately and more importantly adds to your cash in the bank immediately.

Can all businesses have the positive cash-flow model?

Unfortunately, not yet, but times are changing. It used to be, that “positive” cash flow businesses were limited only to service based businesses, but now even non-service based businesses and retail based businesses are getting into this mindset. More and more, retailing of products are now cash first, deliver later thanks to the many “market places” on the internet. Amazon, Ebay, Multiply, even Sulit.com.ph are fantastic places to start your retail business with “positive” cash-flow.

In the end, your business idea is a good first step to start a business, but before you plunge into it, answer this question: is is a “negative” or “positive” cash-flow business?

All the best to you and see you at wealthflowproject.com

Author Box:

Mark So is a fervent businessman, Investor and educator.  He is the Chairman and CEO of Businessmaker Academy—a business, finance and corporate training center.  He is the founder and Chief Forex Trainer of Forex Club Asia, A Trading club of Forex Traders across Asia. He is also the Founder and Chief Trainer of the Philippine Franchise Institute which specializes in training and growing existing Franchise businesses.  Mark, together with his loving wife also created wealthflowproject.com a website dedicated to teaching people how to make money run after you. A sought after speaker for business, investing, You may email your comments and questions to: markso@wealthflowproject.com or call the office at 6874445 / 6873416 / 6874645 for a schedule of his seminars

My Ninong came to visit us from Canada a few years ago, and during one of our lunch get togethers, I overheard a conversation he had with my mom about credit cards. My Ninong you see is a retired corporate executive and is brilliant with money management but was never really a businessman. My mom on the other hand, although an excellent business woman herself, and is a mentor to me in more ways than she knows, believes in cash more than credit and has been very conservative with loans. So the conversation went something like this:

Ninong: “You know, the credit card companies in the Philippines are getting a little too aggressive for me. When I got back a few days ago, I received a phone call from my bank saying that they were giving me a card for free with a ridiculous credit line. It was so big that it scared the hell out if me! So I turned it down.”

Mom: “Yes, the same thing happened to me a few months ago and I also turned them down, I mean, it is scary how much credit they are giving away, I don’t want to be responsible for that kind of money, I mean, I am afraid of what could happen if I lost the card and fail to report it on time, I would be liable for a huge amount.”

So I joined the conversation as I believed in the complete opposite.

Me: “…Well, I definitely understand why both of you feel that way, and I would agree 100% if I was using credit cards as a consumer… But as a businessman, I actually would think twice about turning down a credit line that the bank is willing to offer you for free. In fact, I personally have multiple credit cards right now and I work hard on increasing the spending limits of each of those cards. Because you see in business, it is crucial to have ‘Ready credit’ at a moments notice.”

Both of them looked at me incredulously as if saying, you are out of your mind if you are using credit cards for business purposes.

So I explained further:

“Okay, don’t get me wrong guys, I do not use credit cards to start a business. Using credit cards to fund a start-up business would be extremely risky and definitely not very smart… My purpose for credit cards is to get me out of emergency cash-flow jams when the business is already up and running with a steady stream of income…Every single business on Earth will eventually have a cash-flow problem. Take the case of my first business*, sales were dismal, in fact for the first 8 months of its existence, there was no money coming in and I was pouring in all my savings and income from my job into the business to pay for salaries, rent, electricity, etc. And because I didn’t know how to use my credit cards properly back then, I had to resort to borrowing from loan sharks who would charge me anywhere from 5 to 7% per month just to pay for my overhead. It wasn’t pretty that was for sure. But when I finally learned how to properly use credit cards, that helped me tremendously with my next business ventures”

*I shared the story of my glorious failure and comeback of my first business in my article series titled: Business and the start of a beautiful relationship parts 1 to 3. To read those articles, please go to my blog at www.wealthflowproject.com

Now, at this point, both my Ninong and my Mom were listening intently, so I continued.

“You see, once you figure out how to start a business with positive cash flow, and be profitable from the very beginning, that is the time I take full advantage of my credit cards. Because even if your business has a positive cash flow business model like mine, it will eventually have a cash flow problem down the line, the difference is, this time around the business has actual sales but sometimes, collection delays can will cause you to scramble to generate cash for payroll, or rent or any other business expense. This is where my credit cards come in very, very handy. If I already see a cash flow problem a few weeks from now, I would already start canvassing and calling up my credit card providers and ask how much the rates are for short term loans. And because, I’ve learned to properly manage my credit cards extremely well (with the help of my wife), I can get very affordable cash loans without collateral from my credit cards.”

Ninong: “How much interest do they charge you per month?”

Me: “The lowest interest I’ve ever received is 0.79% fixed interest per month for 12 months and the highest one I ever accepted was 1.25% fixed interest per month for 12 months. Which is way cheaper than those loan sharks would charge. And, to top it off, I didn’t need to provide any collateral, the check was ready in 2 business days, and most of all, it provided me with cash-flow security during the most trying times of the business.”

Ninong: “Well, I definitely see your point Mark, but exorbitant credit lines are just way to risky for me especially since I’m just staying in Manila for a few months. Aren’t you scared of having too much credit at any given time?”

Me: “Credit if used unprofitably is definitely scary, but if used to keep your cash flow healthy, I welcome it with open arms anytime. And believe me Ninong, in the next few years, everything will be about credit. I’m just glad I learned how to use it to my advantage early on because when the time comes where everything will be about credit, I will be one of the few who will be ready.”

And with that, I passed him the stuffed chicken my Mom makes so well, and we had a wonderful lunch.

Stay tuned for the next article where I talk about negative and positive cash-flow businesses.

Author Box:

Mark So is a fervent businessman, Investor and educator.  He is the Chairman and CEO of Businessmaker Academy—a business, finance and corporate training center.  He is the founder and Chief Forex Trainer of Forex Club Asia, A Trading club of Forex Traders across Asia. He is also the Founder and Chief Trainer of the Philippine Franchise Institute which specializes in training and growing existing Franchise businesses.  A sought after speaker for business, investing, You may email your comments and questions to: markso@wealthflowproject.com or call the office at 6874445 / 6873416 / 6874645 for a schedule of his seminars

Credit Cards, are the proverbial stepping stone to wealth. This article explains how I use my credit cards so that I minimize my monthly cash flow burden, use it without incurring interest (and get even super discounts in the process) and lastly get loans without collateral at ‘minimal’ interest.

Credit Cards Do Not Give You More Cash, It Gives You More Time.

You see, most people view credit cards as an extra amount of cash to spend. If you view it that way then you are already doomed from the start, that thinking is actually what got me in trouble many moons ago with my two credit cards back in the early 90’s. (I discussed that in Part 7 of this article series).

The truth is, credit cards don’t give you more cash to spend, it gives you more time to pay for your expenses.

Let’s start with the basics. Every credit card has a ‘cut-off’ date, say the 10^th of the month, a statement date, say the 15^th of the month, and a due date of say the 7^th of the next month. This is how it works:

Let’s use November as an example. All your credit card expenses on or before November 10 (your cut-off date) will be included in your credit card bill for November 15 (your statement date). When you receive your bill, you have to pay the total amount on or before December 7 (your due date).

Now here’s how to use this often overlooked information to your advantage.

If you use your credit card between October 16 (Day after your statement date) to November 10 (your cut-off date), all of those purchases will need to be paid in full on Dec 7, remember always pay in full so you do not get charged exorbitant interest rates and finance charges. If you do this then you get roughly 22 to 27 days before you have to come up with the cash to pay your bill (Nov 10 to Dec 7).

But

if you start using your card after your cut-off date of November 10, say November 12 onwards, guess what? You will only start paying those purchases on January 7 instead of December 7, giving you twice the time (44 to 54 days) you need to come up with the cash to pay for your card!

So the first lesson is to learn how to ‘time’ your credit card use. Find your cut-off date and only start using your card after that date.

If you do not know how to find your cut-off date, get your credit card bills for the past 3 months. Look at the itemized expenses and look at the last item and the date of that purchase for all three bills, they will usually fall around those dates. In some cards, the statement date IS the cut-off date so familiarize yourself with your credit card immediately and try what I am suggesting as soon as possible.

The first time I did this, I was amazed at how much time I was able to enjoy my purchases before I had to pay for it. The problem however was that I ended up over-spending on the card and could not pay it in full even with 44 to 54 days extension.

To solve this problem, I got additional credit cards.

Whoa, before you read any further, please remember that before you do this, you must have No Outstanding credit card debts before you apply for another one and apply what I will be sharing next. Because if you don’t having multiple credit cards will really eat you up alive.

Okay, the purpose of getting additional credit cards is to have cards with different due dates. Unfortunately, you cannot request a convenient due date from the credit card company, so what you do, as I did, is to keep on getting credit cards from different banks but only accept the cards that have no annual fees at least for a year. Then, select the cards to use based on the Due dates. You really only need 2 cards with far apart due dates, so if you have more than 2 and once you find the 2 cards, you can cancel the rest of the cards.

Load Balancing on Multiple Credit Cards is the Goal

1. Go to http://www.wealthflowproject.com and Comment on this article, tell me why these methods won’t work for you or tell me if you (and your spouse) have started doing these already.
2. Let your husband or wife read this article and comment on it as well.

Good luck and see you in the next article!

Do you have what seems to be unmanageable credit card debt? Are you already swearing to cut it up as soon as you pay it off and never use another credit card in your life ever again?

Well, if you are suffering from Credit Card debt in whatever way, shape or form, know that I used to have credit card nightmares too. You see, I used to have very unhealthy habits with credit cards, I used to max it out, pay only the minimum, sometimes even missing the due date. Needless to say, I learned the hard way, that if you don’t pay attention to your credit card debt, it will eat you up alive!

But you see, credit cards are not at all evil, unless you treat it without respect of course. Today, my relationship with my credit cards are extremely cash flow positive but it took me a while, with the loving support of my wife, to figure out how to properly use them. In fact, if you use it the way I do, it can actually be the very thing that will make you wealthier than you can imagine.

How to get out of Credit Card Debt Fast

But before it can be used to create wealth, it must first be managed and controlled. So let’s talk about how to get out of credit card debt fast. Here is the step by step guide of how to do that.

Identify and stop the “useless expenses”:

1.)   Remove any kind of “insurance” that you have automatically billed to your credit card. These are killer expenses. Examples are card debt protection, you pay a few hundred pesos a month so that if you die, your credit card debt is automatically paid for. Another is life insurance on credit cards, the premium you are paying for these are extremely expensive, cancel them immediately. If you want to get insured, make an appointment with a reputable insurance company and ask for a reasonable plan, I assure you it will be a lot cheaper plus you will remove a few hundreds if not thousands of your monthly credit card bill.

2.)   Stop using your card for luxury expenses that you cannot afford to pay in full – Sometimes, you want this shiny new toy that you just have to have for yourself (or to give your wife/husband) but you cannot afford it in the first place. STOP. Because if you cannot afford it and it is not used to generate additional income for you, when your credit card bill comes, you know what will happen right? Yes, you will only start paying for the minimum amount which is laced with an exorbitant interest add on rate of at least 3.5% / month compounded. So, Mark, how can I buy those shiny new toys then? Simple, do not buy them.

Consolidate and come up with the cash to pay off your debt

1.)   If you have more than one credit card. Look for the one with the lowest interest, and with the most attractive “balance transfer” promo among all of them and transfer the balance of the other cards there one at a time or all at once (assuming the balance of the card can handle it). The goal is to stop using the other cards one at a time until you are only paying for one card.

2.)   If you have savings, use it to pay off your credit card debt in full. Your savings is better used to pay off your credit card debt rather than sitting in a savings account or time deposit generating 1% interest a year compared to paying credit card debt of 3.5%+ / month!

3.)   Create additional cash by selling whatever you have that is worth selling and still has value. Sell your old clothes; sell your old gadgets, books, furniture that you no longer use (much). If you have a skill or talent, then learn to sell that skill or talent to create even more cash to pay off your credit card debt. I talk about these in my past article: “Money Management Simplified Part 3”

Once you pay off your Credit card debt in full, congratulations, you will be ready to read my next article where I talk about how to use your credit card with zero interest, minimize your monthly cash flow expenses and get loans without collateral at minimal interest.

Now, if you are serious about removing your credit card debt and learn how to use it to create wealth then here are your assignments:

1. Comment on this article, tell me why these methods won’t work for you or tell me if you (and your spouse) have started doing these already.
2. Let your husband or wife read this article and comment on it as well.

Good luck and see you in the next article!

In part 5 of this article series, I talked about the first step in making your marriage a wealth magnet. Of course if you are not yet married, and planning to, Jhoanna and I wish you the same kind of happiness that we have when you find that one person who makes all the difference in the world.

For those who are already married and are having constant arguments with money, congratulations, you are on the right path, as that is what Jhoanna and I have gone through. These arguments, ahem, “conversations” are an essential part of building wealth. Without these “conversations” you will not grow as a couple, instead, you will just pretend that everything is fine and then figure out way too late that it really isn’t.

So, for those already married, and have not had a single “conversation” about money, then it is about time you had one don’t you think?

BUT,

Before you talk about money, like Jhoanna and I do, it would be best to have a common understanding about marriage and money and a few “rules” to follow so that it does not end up ruining your marriage as it usually does with a lot of people. In our experience, there are 3 usual causes of miscommunication between couples when talking about money:

• You must realise that when you first fell in love with each other, that it was because of either good looks, fatal attraction, common hobbies or mutual love for movies and food or whatever entertains you. Money was usually never spoken of until it was time to know who will pay for the church, the florist, the reception etc.

• Your personal attitude towards money, despite the common interests that made you want to be together, can be the exact opposite of each other. You like to spend, when the other wants to save, or you hate talking about money while the other can’t stop talking about money. You think that a free credit card in the mail is free money, while the other might think it is the tool of the devil, and the list goes on and on.

• Both of you will think that you are right and will want to prove the other one wrong especially after the “honeymoon stage”. Remember, when it comes to money, pride and ego will prevail so neither of you are right or wrong, and when pushed to a corner or when one is made to feel wrong, the person will lash back or close his/her mind to whatever is said after and that may spell the end of the conversation or start the end of the marriage.

So, here are 3 rules each for husband and wife that Jhoanna and I live by that helped us survive these “essential” conversations on money. This is what works for us, so we hope this may work for you as well.

First, the Man must do the following:

• Lead the conversation first with a simple prayer with your wife: “Lord, give me humility and remove my ego during this conversation, give me open mindedness, give me a strong spirit, and help me understand the wisdom of my wife. And may my wife have humility as well, please also give her an open mind, give her strength in dealing with my stubbornness and love me no matter what, Amen.”

• If the conversation turns into a heated argument, NEVER, let the day end without reconciling with your wife. Never sleep angry, stay up the entire night if you have to (also don’t let her sleep of course) but make it a rule to reconcile no matter how bad the conversation may be. Most of the time, the man has to be the one to say “sorry” first. Do so if you mean it, do so even if you don’t want to, forget your pride and just do it, because if she was at fault and she knows it, she will say sorry too.

• Open your mind to what your wife believes about money. Know that she is more than just a pretty face, she is also your confidant for life and how you will grow your wealth together. (This is especially true if she knows more about money than you.)

Now, the wife must do the following as well:

• If your husband does not initiate the conversation, which he most likely will not, you need to lead it. Ask him for help with understanding the family finances. Or ask him to pray with you same as number 1 above. Whatever you do, make him feel important and never make him feel stupid or wrong even if it feels that way. Men are very egotistical when it comes to money. The key to keeping him open to talking to you about money is to stroke his ego and make him feel good about himself.

• Now while initiating the conversation, understand that your husband can be very stubborn and sometimes set in his ways. Do not nag him as this will push him away and may start to avoid you like the plague. Instead, just keep asking for his help, eventually he will come around.

• Now, if the first 2 suggestions don’t work, you can always go the complete opposite and demand to talk about your future. Sometimes a man needs a little knock on the head to make him realise that you are serious about it. (This is Jhoanna’s specialty actually. )

The first 2 suggestions are actually what I believe would work with majority of men out there, the third one works only if the husband worships his wife like I do.

In the next article, I talk about my conversations with my wife about credit cards so stay tuned for that. In the mean time, here are your assignments:

1. Comment on this article, tell me why these methods doesn’t work for you or tell me if you have successfully had an argument already with your spouse.
2. Let your husband or wife read this article and comment on it as well.

Good luck and see you in the next article!

“Who you marry is one of the most important decisions you will ever make if you want to be a success.”

This is not just my belief, but also the belief of one of the wealthiest persons on earth, Mr. John Gokongwei.

Quoting from an article by Wilson Lee Flores, Gokongwei says to him: “Marry a good wife…having a good wife is not only good support for life and career, it’s great to come home daily to good rest. He revealed that ever since he got married, he has stopped going out to parties and stayed at home every night with his wife.”

For the women reading this, it goes both ways, you also have to pick “Mr. Right”. I know, not as easy as it sounds right? Especially since I’m already taken (ha ha ha). Seriously, your “husband to be” or your “husband forever” (and you) hold the key to unbelievable wealth.

You can make it big on your own, but you will make it bigger if you have a happy marriage

After College, I knew I could make it big on my own, and I actually did. I created my own position at Islacom (1995), was “pirated” by Tech Pacific as a product Manager (1996) then was later hired by Lucent Technologies (1997) where I served as a Regional Technical Marketing Manager for Asia Pacific and China at age 24, the youngest one to hold that position. I lived the 5 star life, I spent money like there was no tomorrow, and I remember telling myself at one point in my career — “I have arrived”.

But that was short lived, because deep down inside, I felt empty and unfulfilled no matter how many promotions or accolades I received from my boss(s), peers and clients. I needed more meaning in my life. So, I started businesses on the side thinking it would fill the void. It didn’t. It was challenging, it tested me, it humbled me, but it did not fulfill me.

It only takes one person, to make all the wrong things in your life right.

Believe it or not, finding the best career was my second priority, my first priority was finding that one person that I was destined to spend the rest of my life with. Okay, I know it sounds very corny and cheesy, don’t worry, there’s more. I always felt that I looked like “Aga Mulach” (but a little more handsome) in the sense that I had the “looks” but could never get the relationship right (This was before Aga met Charlene Gonzales of course) because women always took advantage of me, treated me awful or was simply not the right fit. So when I met my wife, I instantly knew that she would be the one. She was “home” to me and she made all the wrong things in my life right.

Your spouse is NOT your equal; your spouse has to be MORE than you

One of the reasons why my marriage is a happy one is because I’ve always believed that I married not just the right person, but a person that is MORE than me. If I am smart, she is smarter. If I am kind, she is kinder, if I am lucky, she is luckier. And it goes both ways. My wife believes that I am MORE than her as well. And because we think that way, we treat each other with more respect, love and gratitude. We have known each other now for 11 years, married for 7 and up to now we never fail to say thank you, I appreciate you, and I love you every chance we get.

The first step in making your marriage a Wealth Magnet

So finally, here we are — The first step in making your marriage a wealth magnet is to first make sure that you have a happy and communicative marriage. So for those happily married, congratulations you can move on to the 2^nd step which will be released a few weeks from now. For those who are married and are having some difficulties, here are a few things that I hope will help you to achieving the first step in making your marriage a wealth magnet:

Try this little experiment:

Smile and hug your husband / wife as soon as you see him / her. Chances are, your spouse will smile back and hug you too (or wonder what you are smoking). It is called the law of reciprocity: Do unto others what you want others to do for you. Remember?

Open up to your spouse:

Before you go out of the house to go to work or to just have fun, chances are, you will look at a mirror to see if you look presentable or at the very least, you look at a mirror to make sure that you don’t have anything unwanted hanging on your face, correct? Well your spouse is your mirror image, if you are feeling bad about anything, chances are your spouse is too. But if you are feeling good about something, then your spouse has to feel that way too. You and your spouse are cosmically connected to each other somehow, someway, you are more connected than you know.

Try this last experiment:

At the end of each day, ask your spouse this simple question: “How did your day go today?” If the other person does not respond, hold his/her hand and repeat the question and add this line: “I really want to know”. If the other person still doesn’t respond it’s probably because he / she is not used to you asking that question, give it time and ask again the next day. But in the mean time, you yourself have to start opening up by telling your spouse how your day went.

Tell me how your experiments go. Post a comment below or Email me at markso@wealthflowproject.com . For those who want to start this article series from the very beginning, please go to http://wealthflowproject.com and sign up for the wealth plan for FREE.