Financial advice to my 20-year-old self

Money, like emotions, is something you must control to keep your life on the right track. —Natasha Munson

Philippine STAR reader and former John Gokongwei Jr. scholar Allan Ritchie Ngo recently emailed me an intriguing question: “Can you share one piece of advice that you’d like to tell your 20-year-old self that readers may learn a lesson from? You can share an anecdote on why you chose that advice (i.e., a personal setback, etc).”

Instead of one piece of advice, I spent time stuck in a traffic jam jotting down these 20 tips. If I could ride a time machine and go back to when I was 20 years old (which was — ahem — just a few years ago), what financial advice would I share with my younger self?

Save more than you earn. My late teacher mom was fond of quoting an ancient Chinese proverb: “A small fortune comes via thrift and humility; big fortunes come from the heavens.” She said that sheer frugality and perseverance are sufficient to accumulate a small fortune.

Write down your long-term money goals. I suggest writing down financial as well as other life goals in detail and with target schedules, so the future will be much more exciting and challenging. I love writing down everything. 

Pay yourself first before other expenses. Before taking care of other mundane expenses, first set aside a target percentage as your personal savings. I heard this advice from award-winning actress and now governor, Vilma Santos Recto. She said that after she nearly went bankrupt years ago at the height of her stardom, due to lack of financial discipline, she recovered and has since habitually saved a certain percentage of her income as first priority, or paying herself first before her other expenses.

Invest; don’t just save. Do not just save cash in simple bank deposits with a low interest rate, think of other wise investment options or ask experts early on. Think about the power of compound interest. Consider the idea that if you were to invest just P2,000 a year from ages 25 to 65, earning eight percent a year, a person would have accumulated over half a million pesos in the bank. If a person saves 10 to 15 percent of one’s monthly salary, then he has much more funds stashed away.

Invest in real estate. As much as possible, find ways to invest in good real estate with a nice location, either through monthly amortizations via a subdivision developer or even through a bank loan. Real estate is a solid investment option and also not as easy to fritter away.

Invest in art but because you love art, not for money. Buy art because it is exciting, fun and uplifting, although good works of art are also good investments. I do not suggest buying art just based on brand names or fads, but because you love it or it is interesting or meaningful to you. The investment side shouldn’t be the main motive.

Diversify investments. No matter how good an investment option or even a business is, do not bet everything on it. My suggestion is to spread the risk and diversify a bit. If you’re too busy to monitor, diversify more your money investments.

Buy life insurance for protection. I think I’m the one person on earth who doesn’t run away from life insurance agents, because my dad died when I was seven years old and my mom didn’t get life insurance benefits. So in my 20s, I called up three agents and asked them to each sell me a substantial amount of life insurance. I don’t buy life insurance policies with investments; I prefer those with maximum life insurance protection. We are all going to die, it’s just a matter of time, but I don’t want to die for free. I can still earn!

Never lose money. I love this Warren Buffett quote: “Rule No. 1: Never lose money; rule No. 2: Don’t forget rule No.1.”

Take care of liquidity. In a society that’s gone up and down economically in recent decades, it is advisable to keep a chunk of money in more liquid form so that you have the flexibility to face different scenarios.

Sit down and study basic finance. Spend a little time studying basic finance; it is not physics or rocket science. Read books, Google and ask experts, too.

Keep track of expenses. Believe it or not, I learned to do this while traveling abroad. List down all the things you spend money on every day, every month, and scrutinize the list regularly. Plan and rationalize your expenditures to improve savings, efficiency and also fun.

Don’t buy what you don’t need and delay buying anything. The best discounts or sales to me are the 100-percent discount or those unnecessary purchases I was able to say no to.

Always try to bargain and compare prices before buying. Discipline emotional or impulse buying by delaying all purchases and trying to first compare prices from different places or sellers.

Avoid unnecessary debt. In this era of easy credit, fast loan approval, and many credit card and loan agents texting all sorts of enticing deals, my advice is always: avoid unnecessary debt. Pay off your credit card expenses at the end of every month. The best situation is to be free of debt; you’ll sleep better!

Set aside cash for emergencies or hard times. Moldex Group boss Jacinto Uy said that we should have an emergency fund in the form of cash in the bank for possible emergencies or problems. Usually, financial folk tell me the amount should be at least six months’ worth of our expenditures. In good times, think of possible bad times.

Increase positive cash flow or have more income streams. Aside from saving money, more exciting is increasing our income sources. In 19th-century Manila, my paternal great-great-grandfather Dy Han Kia was a self-made lumber entrepreneur who started five firms. He viewed each business as literally a “wellspring,” so all his firms had the Chinese name “Guan Hoc” or “wellspring of fortune,” “wellspring of others,” etc. Wealth is not just an asset, but the best is wealth as a source of cash flow. 


When it comes to money, don’t trust anyone. The writer Agatha Christie said, “Where large sums of money are concerned, it is advisable to trust nobody.” I will go further and say that, even with small sums of money, it is advisable to trust nobody. Of course we need to trust our accountant or finance person, but there should always be checks and balances. Never give 100-percent blanket authority or discretion when it comes to money matters.

Invest in yourself. The best investment is not real estate, bonds, mutual funds, blue-chip stocks, art, diamonds, or gold, but in your non-stop education and overall holistic development intellectually, physically, and spiritually.

Tithe or donate to charity regularly. I’m not religious, but I sincerely believe that donating to God and to charity will make us not only more financially resourceful and dynamic, these will ultimately be our very best investments. Do not think, “I will only donate when I become rich.” Make the act of giving a good habit. We are only really God’s stewards of money, everything that we supposedly “own” on earth — even our very life — are just temporary. I want to earn more because I promised my late mom as a kid that I would earn enough to donate 100 schools in her name (I’ve given two already).

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