Give me some credit

POGI FROM A PARALLEL UNIVERSE - RJ Ledesma (The Philippine Star) - November 3, 2015 - 9:00am

As the holidays begin to creep in, what haunted me over the Halloween break was the specter of my looming credit card bill.

To help me exorcise my demons, I called in seasoned financial literacy consultant Rose Fres Fausto, the popular blogger behind FQ.Mom. Although she refused to co-invest in my credit card bill, she did grant me a follow-up interview and shared who should be more matipid in a relationship, who should pay when you go out on dates and… the best “get rich quick” scheme?

RJ LEDESMA: What are the usual problems single men have nowadays when it comes to money. Aside from not having any?

ROSE FRES FAUSTO (Financial Consultant): Lugi actually yung single men because they’re expected to foot the bill.

(No Girlfriend Since Birth [NGSB] representative: Can’t I just treat a girl out on a Candy Crush date?)

ANTON (Rose’s son): You mean men who are single and dating, right?

(Dirty Old Man [DOM] representative: More like single and dated.)

ANTON: Well, it helps to be open about (money issues). When you’re going out as friends, the default mode is KKB (Kanya-kanyang bayad). But when you’re dating (exclusively), it’s a different story.

(NGSB representative: I wish I had a story to tell.)

With the girl I’m dating now, we talk about money a lot.

(DOM representative: What a coincidence! With the girl I’m dating, we also talk about money a lot. Mostly my money.)

There are times when it is KKB, there are times when she treats me out.  What’s important is that you are on the same page when it comes to money.

(NGSB representative: What Facebook page is this so that I can subscribe to it as well?)

ROSE: For married men, it’s a bit of a challenge because you’re expected to be the breadwinner. If there is someone who is more frugal in a marriage, I hope it’s the wife because the man will always want to pamper his woman.

(DOM representative: Hahaha, not in my case. I am the one who wears the adult Pampers.)

The husband is placed in a precarious situation if he is more frugal than his wife. If you happen to be married to someone who is used to the “high life,” I’m sure you wouldn’t want to make your wife feel like “tinitipid mo siya” or you won’t hear the end of it from your father-in-law.

(DOM representative: Sigh. That’s why I’d rather be a sugar daddy.)

The way to handle this is by really understanding each other. In fact, before you get married, you should have talked about your respective “money values” with respect to your mutual goals and priorities. Because if you have someone who is spending way too much (in the marriage), then you can say, “How can we achieve our common goals if you continue to spend that way?” In that manner, it is not an attack on the overspender.

I told my wife before we got married that our common goal should be to complete my 52-piece gold-plated limited-edition Justice League action figure collection, but she has yet to sign off on the agreement. Does being frugal mean having to swear off your hobbies, like my comic book addiction, este, collection? You don’t have to answer truthfully if the truth hurts.

I don’t know, can you easily afford (your comic books)? It depends on what you value. We shouldn’t be judgmental because different people value different things. For example, I don’t like expensive bags. I prefer precious stones.

(DOM representative: Hi, Rose, you might want some of my precious stones. Only they’re still stuck in my gall bladder.)

I can’t say that just because you own a lot of bags, you have a low financial IQ. I don’t know your net asset value and maybe those bags make you really happy. It’s just that these things shouldn’t be prioritized over the expenses of the family’s needs. It goes back to the idea that where you put your money should be aligned to your core values.

When it comes to me and my wife, I value my family jewels. Let’s say that after I complete my action figure collection, I have some money left over for savings For those of us who aren’t too savvy with investing their money, where is it a good place to park our savings? In stocks? Mutual funds? Sweepstakes?

I’m a firm believer that everybody has to have some form of passive income. When in comes to passive income for the long term, the stock market is still your best bet. Or investment in a long-term hold for goals that are equally long-term in nature like getting married or the college education of your children.

That’s why I invested in all those Deadpool action figures! Those collectibles will escalate in price so much so that it will not only pay off for their college education, but they can use the balance to buy a house and lot in Forbes Park in about 758 years.

You have to understand that if a need takes about 10 years of so, then you are better off investing in an asset class with the highest return, which is the stock market. Voluminous studies have shown that stocks give the highest return in the long term. But you should really have different buckets for your financial goals — some should go to the stock market, some into fixed income, and the rest into emergency funds like time deposits or money markets, where you can easily pull it out. Don’t put your emergency money in the stock market lest you be forced to pull out your money at a loss.

(DOM representative: I know how difficult it can be to pull out.)

I often find that Pinoys like to invest in “hard” things, like real estate or jewelry or watches. Is that fine as well?

It’s because these (“hard” assets) are easier to understand — it’s tangible. Especially in our culture, when you own real estate, it’s like you’re “made.” But the truth is it’s not easy to invest in real estate.  Firstly, it requires a huge capital outlay. Second, property is not easy to sell if you need money because it isn’t liquid. You can invest in jewelry or art, but only if you understand it.

That’s what I told my wife when I tried to explain that I “understand” comic books. Then she warned me that a “hard asset” would smack me in the face if I used our stock market money to buy more Spider-Man comics. Speaking of being smacked around, how do people know that they aren’t being scammed by “get rich quick” schemes?

People should understand that there is no such thing as “low risk, high return.” If somebody offers you (an investment like) that, run away as fast as you can.

(DOM representative: Sometimes I feel like the endorser of a get rich quick scheme.)

Sometimes (people invest out of) greed and innocence. But there were some people whom I spoke to that knew they were “investing” in a scam, but were hoping to get out of it earlier. Tuloy, na-karma sila. If (an investment) isn’t registered with the SEC and it’s being sold as a negotiable instrument, hindi pwede yan. And knowing is half the battle.

Unfortunately, (financial) education is not enough. Sadly, we found out that only six percent of those who learn about financial literacy end up improving their financial behaviors. We all know that you have to save and invest for your old age, but sometimes we have a lot of excuses. So the best thing to do is sign up for investment programs that debit your account and invest on your behalf.

Since I am being haunted by my credit card bill, how do I exorcise that particular demon? Sprinkle holy water on my credit card?

Credit cards should only be used by financially responsible people! If you’re on your first job, please don’t use credit cards yet. But if you have to, just use your debit card because it’s almost like paying with cash. And when you use your credit card, pay the entire balance. Do you know that (credit cards charge) more than 36 percent interest per annum? I also discovered that 60 percent of cardholders do not pay (their bills). Sometimes it’s due to ignorance and sometimes they forget. But grabe the effect! What kind of investment gives you (those rates of return)? Nothing!

I know na what my next long-term investment will be! I’m going to invest in credit card debt!

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For comments, suggestions or if you want to crowdfund my credit card debt, email or visit Follow @rjled on twitter and @rjled610 on Instagram.

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