All of us have our own reasons to contribute to charity.

How much should we give, how we should give and to whom we should give are matters which are quite personal to each and everyone of us.

In a world where spending less and less is become a mantra, charity is quite a misfit. What corresponding value do we see or get when we give to charity? How should we allocate scarce funds for charity?  When even paying down a punishing debt requires self discipline, what kind of motivation and self discipline does giving to charity need? 

I think my earliest introduction to charity was watching my eldest brother make donations to roadside beggars. My original motivations were, I suppose, also from the concept of “being good.” Being good means we should help people and one way is to make donations.  

As I grew older, my motivations changed. It changed from the vague concept of “just being good” to specific guidance from our Holy Book.

Though I am no religious expert, some verses from our Holy Book have really struck some chords in me.  My favorite guiding verses on charity are:- 

Verse 274 of Surah 2 

Those who (in charity),

Spend of their goods

By night and by day,

In secret and in public,

Have their reward

With their Lord:

On them shall be no fear,

Nor shall they grieve      

Verse 18 of Surah 57 

For those who give in charity,

men and women,

And loan to God,

a beautiful loan,

It shall be increased manifold,

(to their credit)

And they shall have (besides),

A generous reward.  

Verse 9 of Surah 76 

Saying, we feed you

For the sake of God alone

No reward do we desire

From you nor thanks. 

These 3 verses (I am sure there are many other verses extolling charity) are my favorites. They are my guiding lights and give me my strong motivation to give and to expect nothing in return from the recipient(s), not even a word of thanks.  

I am sure that all the great religions of the world, Christianity, Judaism, Buddhism, Hinduism, Sikhism, etc., have equally compelling messages on charity. 

For people with strong religious beliefs, the motivation for contributing to charity may probably come from religion.  

What about those without strong religious beliefs? Where does their motivation and discipline come from?

The four mistakes we have talked about so far are :- 

-         Not paying myself first

-         Not forming or joining a correct peer group

-         Not having a written budget and

-         Not managing my career properly  

There are more.

The next one is “not getting a better or the best deal on my mortgages”. 

My first mortgage was taken sometime in the late eighties. At that time, I was holding a key management position in a PLC.  The bank officers came to my office and took my particulars. A week or so later, they returned, this time with a solicitor. They had the documents all prepared and all I had to do was to sign on the dotted line.  

Which I did. 

The only things I remember about this mortgage :- 

a)    The Bank

b)    The amount borrowed

c)     The term and

d)    The monthly installment  

In the rush of the feeling of importance, I did not know then nor did I find out what the interest rate was, or whether it was a competitive one. And I did not even read the loan agreement and the other documents that came along with it.  

This loan was prepaid in full about 75% or so into its term. 

One would have thought that I should have learnt from this experience. Unfortunately I did not. 

With this house now free of loans, our family shifted to another town. We took another fresh mortgage on this first house and used the funds to pay for the second house in the new town + the renovations.  

As I was no longer holding that so called “important position”, this time, I had to join the queue and apply for the loan.        

Again the only things that I bothered about were same 4 things mentioned earlier. Now, having learnt a lot more about PF from the blogs, I have calculated the “losses” from this second misadventure. 

Had I shopped around for rates, I would have reasonably easily gotten a 10% reduction. If I had taken the lower interest rate loan and paid the same installments, I would have a year less to go. 

What I should have done

a)    I should have done comparison shopping for rates and terms of the loans. This should not have been too difficult an exercise as we do not have too many banks in our country. 

b)    I should have read every document carefully before signing. Though in this case, no surprises have come up so far, I have given the bank powers to raise rates at their discretion etc. (Though my loan is a fixed rate loan).

PS:

I tried to refinance the loan sometime last year, but the bank’s lawyers again came up with clauses allowing them to raise rates at their discretion, despite the ads promising an absolutely fixed rate loan throughout the length of the loan period.

My wife and I have since then decided to sell off the house and pay down our liabilities.

Don’t repeat my mistake, please

The purchase of our home is usually one of our biggest commitments. Hence the mortgage would be one of our biggest and longest liabilities. This liability has to be shopped for carefully, comparing rates and terms.  

If we are a good credit risk, we should make the Bank work for its money. 

The three mistakes we have talked about so far are :- 

-         Not paying myself first

-         Not forming or joining a correct peer group and

-         Not having a written budget 

Another mistake that I have made and beseech you not to make is “not managing our career”. 

I got my first job,with one of the then big 5 accounting firms, almost immediately after graduating with a Bachelor’s Degree in Physics. It was as an articled clerk. Most of my fellow colleagues then were school leavers.  

This was “my first formal job” and I had no thoughts about being paid well below what was a graduate’s starting pay. (Thank God for this.) The firm gave us study leave for the accounting exams, and I qualified as a CPA within the given 4 years. By then my salary had also risen to be slightly above the graduate entry levels.  

At this point of time, I should have thought deeply about the choices available and how I should maximize the earnings from my career.  

I didn’t. 

Instead I just joined the first company that made me an offer. (They called me.) It was a bank and I spent only 5 months there. The job which involved reporting to our Central Bank and filling up rows and columns of figures was about the most boring job I have ever done in my life. The only good thing was that I met my future wife here.   

Based on a friend’s suggestion, I joined another company where I stayed for 6 years. Basically after that my career consisted of joining companies at the invitation of friends. Each move resulted in higher take home pays, greater responsibilities and opportunities to travel etc.

There was a brief period where I resigned hoping to do something on my own. This was done with no planning and was a disaster. Luckily another job came along. 

I should have “managed my career better.” 

The best blog resource I have seen on this is Free Money Finance’s series on careers. (He proclaims our career as our biggest asset and it is not surprising that he has a whopping 270 posts under the category of “careers”.) 

Let me compare what I have done against FMF’s great post on managing our career.  

Two aspects of a career should be evaluated.

o       Quantitative measurement of salary and employee benefits.

I did not pay enough attention to employee benefits. Benefits like subsidized housing loans, training schemes, and share option schemes would have a mighty big difference financially, even if the take home pay had been lower.

o       The second is a set of qualitative measurements which are even more important. These consist of new skills learnt, social connections we make and harmonization with the rest of our life and goals. I have only gone for those short 1-2 day courses as part of continuing education. Most of the new skills learnt were on the job and reading up on my own.

Whilst almost all my jobs allowed me great contacts, I have never learnt how to strengthen my network.

o       A third issue that I would add is evaluating the employer as one who truly seeks to attract and retain talent.

We are a developing country. Many of the companies in the corporate sector paid only lip service to the fashionable tagline of “people are our biggest asset.”

I have had some “good”, “not so good” and some “not good at all” experiences in this area.

What I should have done

a)     I should have learnt how to write a proper “winning” resume that would have highlighted what I had and could offer to a prospective employer.

b)     I should have identified, screened and shortlisted my potential employers with my list of “must haves”, “good to haves” and “wants”. Then I should have designed my plan for getting my desired position, and worked on it.

c)      I should have learnt about the usefulness of networks and put in a lot more time and effort on this aspect of my life.

d)     I should have considered and evaluated employee benefits a lot more carefully.

e)     With my career properly addressed, I should have crafted proper plans for moving on to the next stages of my life. 

Don’t repeat my mistake, please

Our career is certainly one of our biggest assets.

We spend a lot of time on our careers, often sacrificing once in a lifetime family events like our kids graduating from preschool, their school concerts etc.  

Proper planning and management should be accorded to maximize both financial and non-financial gains from this investment.  

Properly managed, our career may well take care of all our financial requirements, including retirement.

The lessons that I so wish I had learnt and mastered much earlier in my life are :- 

-         paying myself first and

-         forming or joining a correct peer group.

I have now set myself on a crusade, mostly through this blog, to ensure that my children learn these two lessons much earlier in their lives. 

There have been other mistakes. Lots of them. Perhaps writing about them may help others. The costlier ones will be covered here, in no particular order. 

Mistake – Not having a written budget 

I have never been “broke” since I started working, Thank God. This has not been due to adroit financial management, but thankfully, as a direct result of my background. I come from a poor family. And the early difficult years have been embedded deeply into my psyche.  

Though I have always spent less than I earned, there was no system to it. There were no investments systematic or otherwise.  

I started saving I think, around the time, my second girl was born. Not saving what I should, rather an amount that I thought I could “afford”. I have never done a spending budget, personal or family until recently. 

I now see and have started enjoying the advantages of having a budget 

We may think we know where our money is going, but believe me, we are only fooling ourselves. Though payments like mortgage payments, insurances etc., can be tracked, it is the expenses in the “others” category that end up draining us.    

By drawing up a budget, our expenses can be broken up into several categories and tracked category by category. This way, the management is less complicated and drainers can be identified and tackled.   

For example, my family now knows the amount we spend on phone bills. It is unduly high and is being reduced now. 

Club subscriptions that we have paid for years while hardly using them have been cancelled. 

Petrol bills have been cut down by converting the car into a NGV. 

And so on. 

The danger of not having a budget is that you don’t quite realize where the money is going and blame the wrong people or look at the wrong reasons.   

I used to have some quite messy quarrels with my wife over this. Only after the budget was drawn up and discussed have we both realized where our biggest drainers were. 

We had debt levels that were too high. This led us to seek cheaper financing sources that did not work out. So now we are disposing off our investment property.

I do believe that the actions taken since drawing up our budget will have a lot more positive impact on my family’s financial well being than the steps taken in the last 3 years! 

As an additional bonus, now there is so much better alignment between my wife and me, and in fact, the children in managing our finances. 

Don’t repeat my mistake, please draw up your budget. Monitor your spending. Even if it is only for keeping you informed, do it. 

And if it is “how to budget” or more “why must budget” information that you need, please read this excellent and most timely post by Free Money Finance.  

Patrick at Cash Money Life wrote that our greatest asset is an intangible, i.e. our ability to generate income. I am in complete agreement with this view. 

In fact, almost all the methods of valuation of businesses are tied, in one way or another, to the ability of the business to generate income.  Even if we do have an asset that generates income by the busloads, it was “our ability to generate income” that resulted in us owning the asset in the first place. 

Pinyo over at Moolanomy has also given his views on how to protect this “greatest asset” of ours. 

How then should we nurture this asset so as to reap its fullest dividends?

Our ability to generate income is largely dependent on :- 

Our educational levels 

This is pretty much self explanatory. Having said that, we have to take proactive steps to ensure that our education is in tune with current day market requirements. This does not just apply to those of us in careers, but also to our ability to generate income from investments, trading, arbitraging etc. The informal part refers to knowledge gathered from books, blogs, trade shows etc. 

And of course, our continuing education. Many Internet entrepreneurs are products of this.

Our Past Experiences 

Our past experiences will have a direct impact on our ability to generate income. Almost all higher level jobs require “experience”.  And we all value the advice of experienced experts in the fields of investing, money management, real estate etc., over the inexperienced ones.  

Mistakes made and the lessons earned hone our skills and ability to generate income. 

Our network of Friends and Family 

Our ability to generate income would be almost directly proportionate to the strength, depth and coverage of our network. A person who has a network of close and trustworthy friends in the banking, real estate, stock broking and investment banking fields would most probably have a far better success rate in investing than one who starts out alone.  

Our travels 

Travel broadens the mind. Even though globalization has made the world a smaller place, not all parts of the world are the same. For example, certain parts of Asia may be comparable to that of the UK, say, 25 years ago. So if someone from the UK visits that particular part of Asia, he / she may think about how the UK has progressed and bring those changes to Asia.  

Let us think MacDonalds in Kuala Lumpur, Starbucks in Jakarta, etc. 

To nurture our greatest asset, we have to nurture these four areas continuously.

Where should we focus our reviews 

When we draw up this list for our personal individual situation and seek to identify a unique opportunity, we should remember the following.   Business opportunities are created when we have a service or product that :- 

a)    makes people money, 

b)    saves people money, 

c)     makes people feel more secure, physically or emotionally,  

d)    makes people feel better, physically or emotionally,  

e)    saves people time.

I am sure, there are others, but these broad areas should be good enough. When you put these two together, we should be able to see that a job or a career need not be our only option.  

Whether we take a job and work on the other options part time is not the issue. The fact is that the door is now open wider, and we should be in a better position to, at least see, how we can generate more income.

For me, this exercise has given me ideas on two book projects.

I have earlier written about doing our family budget for the first time in our married life and our intention to work on paring the budget further. 

One item, telephone bills, was a bit of a bother. My wife and I have between us 3 cell phones, 1 landline, 1 fax line and an Internet connection. The monthly bill comes to a handsome sum. 

Can we do something to reduce this bill? 

My wife and I are quite, no, very, different in character. I am a numbers and logic person. Seeking order and organization in everything I do. I have one checklist for this and another checklist for that. (And usually end up check listing myself to a standstill). I would most probably be classified as “unfriendly” at almost every first meeting with anyone.  

My wife, on the other hand, is a people’s person. She is bubbly and has something nice to say about almost everyone she meets. She knows all the people we deal with in our lives - our grocer, the children’s teachers, the school principal, the school canteen operator, the local police station people, our doctor, the pharmacist, the bank tellers…….well, you get the idea.  

This is on top of her 12 uncles and aunts from her mother’s side and another 12 or 13 from her father’s side, and a serious busload of nephews, nieces, grand nephews and grand nieces.  

Then there are her former colleagues, my colleagues…. 

I shall not even try to complete this list. 

And in line with her people personality, her one weakness is the phone. Maybe weakness is too harsh a word; I should perhaps use “her one necessity”. 

We have had some arguments on the telephone bills. However, since the “budget day”, she is a lot more tolerant of my arguments on the need to cut down the bill. 

We have now realized (yes, I know, I am quite a peabrain) that the phone companies have various plans.  My wife and I have done some research on the plans available. Plans that would suit our requirements and help bring down the damages somewhat.  

As I may be traveling this week, my wife has agreed to drop by our phone company’s office and sign up for the new plan. 

This is indeed a very comforting sign of our financial alignment getting better.    

I have acknowledged that 2007 was a year of a paradigm shift for me. 

With this has come the drive to be a lot more frugal, a lot more organized in managing our finances, and a stronger drive to earn more money. 

Two plans have been set in motion in 2008. 

Launch our goat farm 

My wife and I have long wanted to start this. Procrastination came naturally as we consoled each other that we had not found the “right piece of land”. In late 2007 all the pieces fell in place. 

A piece of land owned by relatives of my wife came available. This was the only “asset” the family had, so we did not make any attempts to offer to buy. Rather we proposed a joint venture and it was accepted. 

My wife and I provide the capital to start up and operate the farm. Zai, my wife’s cousin brother, (who had been planting mangoes on the land before this), will be handling the work on the ground and manage the farm when completed. 

The farm is taking shape now. The land has been cleared, fenced, access roads improved and the goat sheds are now in progress.  

We have targeted 1^st April 08 as the completion date and have marked 5^th April 08 as a date where we’ll have a small “kenduri or thanksgiving prayers” to launch the farm. 

A little on Zai and his family.  

His family consists of his grandma, his mother, his 3 sisters (one elder and 2 younger), his nephew and his children(two boys and a girl). His family has always been very close to us. His grandmother stayed with us and helped nurse our son and the little girls when they were born, whilst his mother is one of my wife’s closest confidants. (They have kindly agreed that the farm be named after my mother). 

My wife and I both know that Zai will do his best to make the farm a success. On our part, we have to make sure that there is adequate funding for the farm, and assist in marketing etc. 

Once a week, I drop by (about an hour drive from our home) to see the progress. So far it is looking good. 

The company in which I was literally gifted a 25% stake, has secured a  project in Indonesia. (I am writing this post from Jakarta).

This project is for the building and leasing of common telecommunication towers for the telecommunication operators in Indonesia.  

There are still a number of issues to be resolved, and the prospects look great. God Willing, we should be starting work around the same time as the farm is launched, i.e. beginning April 08.  

We have done our business plans for both these projects and there are some spin offs that can be created once these two take off. There is a lot to be done and 2008 looks like it is going to be a busy one. And also looks good for the wallet.  

There are many kinds of “helping hands”. 

There are hands that help us in a time of dire need, there are hands that just give us a break and there are hands that show us the way.  In our lives, there must have been many instances of us having been given helping hands.  

It could have been our teacher in school, who went out of her way and patiently taught us something that we just could not get the hang of. 

It could have been our boss who, based on his judgment, promoted us to a job that we had no experience in. The lucky break many talk about. 

It could have been some community program like this which gave a helping hand to Miguel Santos. 

It could have been a sibling, who sacrificed his or her wants or even needs to ensure that our needs were met.  

It could have been great neighbors, as Karma Calling points out. It could have been something seemingly inconsequential at that time, but the influence of which we still feel today. 

We may now have gone our respective separate ways and may have even forgotten about the particular helping hand. But some events may trigger off a memory, and we can’t help feeling a glow of gratitude. 

These days I find myself thinking a lot about the people who in one way or another helped shape my life to be what it is now. Many of whom, I did not even thank properly. 

This blog now gives me an opportunity to pay them tribute. Of course, I don’t expect most of them to be reading this blog, but at least my conscience will be a lot better. 

What about you? Have you thought about those who have given you a helping hand?  

A good friend of mine once told me that we should never ever underestimate the wife’s power to influence the husband. 

His observation was that the wives use the “fine needle” approach. Say for example, the wife does not like you going out with your good old college buddy. The wise wife will not try to stop you head on. Rather it would be a continuous series of seemingly innocuous comments, small tasks given to you just as you are about to go……… fine needle pricking, fine needle by fine needle, something that you will not even notice, until one day you have a blinking bazooka wound on you. 

And you stop by yourself, never knowing what really hit you. 

It’s the same with corruption. It envelops us, starting as issues almost inconsequential and creeps slowly and surely on us. The trick is to recognize it as it starts and kill it off straight away.  

Cash Money Life had an article titled “A question of Ethics and Money……..” 

He sought the views of his readers whether they would return extra money given out by an ATM. Everyone who commented had no doubts they would return the extra money. Some pointed out that the transaction would have been logged and / or on CCTV and the Bank would eventually know anyway.  

What if we knew for sure that no one would know? How then would we react?  

Our reaction then would we akin to how we would react to an offer of corruption.  

I live in a country whose reputation for corruption can be vastly improved. My children may end up in jobs which may allow opportunities for them to be exposed to corruption.

We have set three rules in our family which should help take care of issues like this. 

a)  Our Family Mission Statement includes the paragraph that “our sources of wealth must be capable of being revealed with pride and dignity…..” 

This is pretty much self explanatory. If we have gaps in our explanation of how we obtained this or that item of value, then these gaps would be open to speculation.  

b)  Never accept any offer from anyone, which you cannot easily reciprocate. 

This may be a little tricky. The offers will start in small innocuous ones like meals and presents. Meals that you can easily reciprocate. These, then start getting a little more expensive, perhaps with some travel thrown in…etc. We just have to read the subtle signs and say no. 

c)   Would you get this “gift” if you were not at your current post or position? 

This is another good test. We have to carefully evaluate ourselves the people who claim to just give gifts because of the festive seasons. Would they be doing the same, were you not in the position? If in doubt, then just say no.   

The seductive nature of corruption is legendary. The nature of its irreversible trap is something not fully appreciated until we are trapped within.  

I hope that my children will know and understand how to recognize the dangerous creeping vine known as corruption. And never ever get entangled, whether other people ever know or not.  

And no wealth accumulated out of corrupt dealings can ever give us true financial independence.

You think this skill is not cool? Or do you think this has nothing to do with personal development? 

Hear me out. 

If there ever was a skill that is easy to learn, a skill that would save you tons of time, a skill that would save and / or earn you money and a skill that will make you as cool as anything else can, it is cooking. 

Cooking used to be a skill that almost everyone learnt as part of growing up. Now with so many parents working, time for cooking is less available, and is easily replaced with fast foods and take-aways.   

As a result, many children are growing up not having this useful skill. Just see the benefits: 

a)    Cooking at home, taking lunch to work, planning our meals a week in advance, etc., are all rated up there, not only in the world of personal finance, but also in the world of healthier living. 

This alone should rate cooking skills as a must have. 

b)    Flexibility in being posted overseas. In 1998, a bunch of us turned up in Ghana to work. Food was something that we did not put much thought on. (We were a small company, not a huge conglomerate that would have had checklists for these kinds of things.) 

Ghanaian local cuisine was not something that many of us could adapt to. Meals at hotels and restaurants were not affordable as an option for meals. Thank God, we managed to find house maids, who could cook   some basic food that we were used to. 

c)     As we all must know, restaurants that serve good food are a great way to make money. So knowing how to cook opens up yet another option for earning money. 

d)    In many of the movies that I have seen, the line that seems to impress the ladies the most is the hero coolly explaining to his date, (after serving her an excellent meal), that he cooked it. I strongly suspect this spills over into real life.

e)    Restaurants generally do not make food with our health in mind. They usually serve what is saleable, what makes money for them and what is easy to prepare and serve.  Knowing how to cook would assist us tremendously in selecting better ingredients and making far healthier food. 

f)      Just like we like frequenting restaurants that have a reputation for serving good food, we look forward to visiting relatives and friends who serve delicious stuff. The great cook has a great way to widen and strengthen his/her network! 

I have a young friend who likes food and his wife is an excellent cook. Together they are now planning to launch a small catering service, whilst he still holds on to his full time job.  

I have no doubt that with cooking skills getting to be less and less common and with my friend’s passion for food, his venture will grow from strength to strength.