Financial Diskarte 1

Before the year 2014 starts, I've already set all my financial goals but as days & months go by as I fulfill every goal that I have set I've encountered some problems along the way. I used to think that these were problems but realizing how I was able to surpass them I now consider them as challenges.

Financial Challenge 1 - Puhunan & dividend shares
(This scenario happened last May)
Scenerio A
My Kuya approached me: "Ging (my other nickname), may sa order sa akin - kailangan ko ng P5,000.00 pambili ng 100 kgs rags, tutubo din ako ng mahigit 2,000. Puede mo bang gawan ng paraan?
I answered- okay, sige titingnan ko.
Scenerio B

While I was still thinking of some ways to help my kuya, my younger brother approached me:
Ate, kailangan ko na ang pera ko pambayad ng credit card & check up ng asawa ko.
I answered- Alam mo naman na di puedeng basta mag withdraw agad agad sayang ang interes at July 1 pa ang safe withdrawal. Pero mukhang kailangan talaga ng kapatid ko kaya tinanong ko sya kung magkano kailangan nya baka pede kong gawan ng paraan para maantay pa ang July 1 for safe withdrawal, nakakapanghinayang kasi less than two months na lang ang aantayin.

( I have an account called capital contribution in one of the SLAI's in Villamor Air Base.This capital contribution account can only be withdrawn every July 1st & Jan 1st otherwise your dividend shares will be down to savings account interest (from 9% down to 1% per annum).

 SOLUTION:

Insta-Cash Loan from my Eastwest Mastercard

And

My Time Deposit & Savings Account @ WealthBank

PRACTICAL APPLICATION

For Scenario A:

I made an Insta-cash loan @ Eastwest Mastercard @ 0.95 % add-on interest payable for 12 months. Since P 10,000.00 is the minimum amount required for cash loans, I lend the P 5,000.00 to my kuya while the other half was given to my younger brother. Here's the details:

Loss/Gain Comparison in my eastwest card P 5,000 insta-cash loan

For Scenario B:

For my younger brother he needed atleast P 35,000.00 to settle his credits and to back up the medical expenses of his wife. So I gave him the other half of the cash loan (P 5,000.00), close my time deposit account (P 25,000.00) and withdraw (P 5,000.00) on my savings account. Here's the details:

Loss/Gain Comparison in my eastwest card P 5,000 insta-cash loan

Plus I sacrificed all my emergency funds (both time deposit & savings in Wealthbank)  here to save our dividend shares in SLAI account from being forfeited. Anyway, the interest rate I got from my time deposit account is only P 74.00 compared to the P 14,600.00 that will be lost to us.

Conclusion:
Though things didn't work out the way I planned them to be, looking back on my decision I think it's a win/win solution. I was able to help my kuya earn P 2,000.00 & continue his sideline/business while he is still paying for the monthly installment to my credit card.

As to my younger brother, I've  given back all his money from that SLAI account plus his whole dividend share last July 1 while I'm still paying the monthly installment in my eastwest mastercard, plus I got my whole dividend shares too :).

It's really an advantage to have an emergency fund to help us out in these unexpected turnarounds & credit card may not be bad at all. Like I said in my previous post - credit cards can either bring you down or back you up financially. You just have to know when to use it properly.


Happy Weekend!