Rat Race Running

I started working in 2015. Since then, I’ve heard a lot of financial advice and lessons from several groups of people. Some are very sound advice, while some are pretty intriguing, but other times they are just plain terrible and dangerous.

The funny thing about these dangerous financial advice is it’s mostly coming from financially-compromised people.

I believe that before we can provide sound financial advice, we should first have a good financial foundation.

I know it is a cultural norm when we avoid talking about money. I also grew up in that background, but the real problem with this is that if we don’t seek wise counsel from respectable people, we will receive bad financial advice from financially illiterate individuals.

This post does not mean to offend anyone or demean other people’s situations. So, if you disagree with some of them, comment down below.

Out of the countless financial “advice” I’ve heard, here are seven I found most amusing but also dangerous:

1. “Dapat ubusin mo agad ang unang sahod mo.”

I heard this tip from a colleague before I received my first salary. He said that according to his friend, we should immediately spend every last peso of our first salary.

I can’t remember why, but it seemed to me that it was like a ritual for them. But I know that it is not a good piece of advice immediately.

Imagine spending every last peso of your first salary; you will quickly fall into the debt trap as early as your first month. Someone who will follow this most likely does not have a budget in place.

Another variation is to treat everyone during your first salary, a common scenario among families and colleagues. If you can spare some, you may. But don’t feel obligated to do so out of tradition.

This mindset closely resembles the YOLO mentality, which can cause many problems in the future if not addressed as early as possible.

2. “Dapat mag-loan ka kaagad habang bata, para kapag matanda ka na, malaki na ang pwede mong i-loan.”

I believe that loans should be avoided like the plague and it should not be your primary lifeline in times of emergency.

I know many people take out careless loans, which is best summarized by Dave Ramsey. He said, “We buy things we don’t need, with the money we don’t have, to impress the people we don’t like.”

I know some people need to take out loans to survive, and I respect that. However, if you are in a position of privilege, it is better to always pay in cash. It would be best if you re-evaluate your spending habits.

Because if you can’t pay for something twice, you don’t afford it yet. Always remember that the borrower is always a slave to the lender. (Proverbs 22:7b)

3. “Dapat palagi mong gamitin ang loan mo sa SSS/GSIS/PAG-IBIG kasi baka magamit ng iba.”

I heard this a few more times than I wanted to, and it makes me cringe every time.

The main problem I find with this advice is why anyone would not report if a loan were falsely applied on your behalf without your knowledge.

And if the said scenario occurs, why would you pay for it? Isn’t it wiser to report such fraudulent claims to the customer service or legal department?

Getting loans you don’t need just because of an urban legend will only build a dangerous habit of taking out loans, even if not needed.

We should have a paradigm shift for the younger generation and challenge the older generation’s prevailing belief about loaning.

4. “Taya ka lang nang taya sa Lotto, malay mo manalo ka.”

The probability of winning the lottery is so tiny that the likelihood of getting hit by lightning is higher. It’s just mathematically unwise to do it.

Just imagine if someone kept betting on the lottery every day for the past 20 years. The amount spent on the lottery would have earned more if invested in other financial vehicles like mutual funds or the stock market.

If you don’t know how to manage your small amount of money, it will be more challenging to manage a considerable sum of it.

That’s why it’s important to be faithful in little things, for God will bless you with greater things (Luke 16:10).

5. “Wag kang kukuha ng insurance kasi para kang nagtatawag ng aksidente.”

It was sad when I heard this “advice.” It only showed that so many people are not yet financially literate enough to think of savings and insurance as protection if emergencies happen.

So it’s essential to understand the purpose of an emergency fund and insurance. Emergencies will always happen. It is not a matter of if but a matter of when.

If an emergency happens and you are not prepared, it will be much harder for you or your family. A lot of debts happen because of unexpected expenses we could have prepared for.

But more than life and health insurance is soul insurance. Do you have a personal relationship with Jesus if you’ll end up using your life insurance?

6. “Wag kang magi-invest sa stock market kasi insiders lang ang kumikita dyan.” 

It was ironic to hear this from someone who was not invested in the stock market. Maybe he was intimidated by the market, which pushed him to fear. Or perhaps he tried it, only to fail and never to return.

For retail investors, we may never know what is happening inside the companies we buy in the stock market. But it is essential to understand that publicly-listed companies must disclose company information.

Like my post about investing in stocks, there are also indirect ways to invest in the market. We have Mutual Funds, UITFs, and even VULs.

7. “Dito ka mag-invest sa *insert get-rich-quick scheme*, sure dito na tutubo ang pera mo.”

Once someone offers you a risk-free or guaranteed investment, run as far as you can from him and never look back.

It is one of the most fundamental rules in investing; the reward is directly proportional to the risk you are willing to take. Investments can only offer historical performance but are never a guarantee.

Back in 2017, at the peak of the Bitcoin bubble, I had so many Facebook friends who were hyped with greed and the desire for easy money. Then the bubble popped, and they lost a significant amount of their money.

It is also a common multilevel marketing strategy or what’s typically called “pyramiding.” If your group is focused more on recruitment than selling a product, it’s a scam.

Some of these scams and get-rich-quick schemes are obvious. But due to greed, many people still fall victim to it and will continually fall into it until they understand the basics of personal finance and avoid greediness.

Final Thought:

Money is neutral. It is a tool. The money we give to tithes and charity is also the same money bad people use for evil deeds. Even the Bible didn’t say that money is the root of all evil. It is the LOVE of money that is the root of all evil (1 Timothy 6:10).

Integrity is critical in our everyday lives. So, it is vital to have them while giving advice. One of the common issues for many is the financial aspect. That is why you must talk to experts or knowledgeable people if you have questions.

It is like asking for medical advice. You don’t go directly to Google to search for what you’re feeling. Else you’ll self-diagnose that you have cancer or other terminal illnesses.

Likewise, when you have a financial inquiry, talk to financial planners. If you need insurance, talk to insurance agents. If you have questions about the stock market, you seek advice from stock market experts, and so on.

For the younger generation, we need to be discerning. We have to know which is sound advice. There are so many inputs from the world today. So it would best to have the wisdom to discern right from wrong.