NU 12 # 3 by Analiza G Mendoza - investing in foreclosed houses

ANALIZA G. MENDOZA

AUG. 13, 2012

NU12 #3

SPENDING HABITS

"Spend whatever is left after saving" a popular advice from Warren Buffet.

As a child, my father instilled to us the value of saving for rainy days. When I first got a job, my father reminded me again to save as much as 40% from my salary. And diligently I did. While my officemates would treat themselves to Starbucks or to Jollibee or Mcdonalds on a salary day, I would politely decline and go home. Every cent is that important to me. One of the reasons why probably at 30 I was able to buy a house and a car is because of how well I handled my finances. Coming from a poor family in the province of Bacolod taught me to value money. I told myself that I will never let myself be poor again. I know how it feels to beg your relatives to borrow or ask money.  It was humiliating.

For four years, I was able to pay the monthly amortizations of the house and the car. I was able to budget our income for all our obligations. But what I discovered is that after paying the amortizations, it did not increase my savings. Why? Because I was busy rewarding myself with material things that I deprived myself of from the start. We finally got what we need and I thought that was okay. My family have a house we call our own and my daughter is studying in a good school.

It was reading Millionaire Next Door and Go Negosyo (reference books of the course) that I realized something is wrong with me now. What happened to my spending habits? I think I have to go back to the basics. Live simply and save 40% of my income just like before. Things are not permanent, my work and our business. I have to do something. Since I don't have monthly amortizations to pay now, my goal next year is to invest in foreclosed houses. This I will later develop and turn it to a profitable business by having it rented. I have to make a choice between investing in the things that I want, buy material things that I consider investment or invest in something that will give financial security. I would rather choose the last one. I cannot just rely on saving my money because I end up spending it. If I buy an investment like a house, I would be obliged to pay the monthly amortization. I realized that people and Iam among them, without pressure and goal become too relaxed with life.  While stile early, I want to save more and invest more. Forget about the material things. They are temporary. Yes it will give me prestige and status but I will lose retiring comfortably if I don't change. 4

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Ana G. Mendoza

Millisys Distribution Inc.
Tel no. 927-7063 loc 108