Using Online Promos

On my way home last night, I happened to glance at a huge advertising screen along the highway. Among the myriads of billboards scattered about the busy road, one particular line caught my eye. There it is emblazoned on the billboard the URL of a website which offers unbelievable discounts to members. Why is this particular billboard (and website) so special that it caught my attention? Well, I'm one of the members who have been availing of these unbelievable discounts. 

What are online promos? 
The concept of online promos is not new. They are somewhat similar to the promos aired on the television and to those we see being displayed at the malls and shopping centers. With the onset of the internet, these advertisers channeled some of their resources to online promotion. As a matter of fact, online promos has been the reason for the irritating spam emails we receive in our inbox. They offer irresistible deals which more often than not, lead to unplanned expenses.

It is worth mentioning that most online promos have deadlines. You need to buy a certain product or avail of their services within an allotted time in order to take advantage of their promo. "But wait, if you order right now, we'll give you another 50% discount!" Sounds familiar? 

Why are there online promos? 
Online promos create a huge buzz on the internet. People would start talking about the products or service or whatever is offered in the promo. Consumers would start to notice them. Once the advertisers have gained a sufficient number of followers, they drop the promos and hope that their new followers would stick to them. Online promos is a way of saying to the consumers, "Hey! Look! We are here! You know you need us. Come and try us." In other words, it is a chance for the advertisers to showcase what they are offering.

Are they too good to be true?
Most promos, I would say, are too good to be true. There would be some "smart" advertisers who would mark up their products and services before starting the promo. That way, the consumers would think that the promo is enabling them to get huge discounts where in fact they've just been given a 0.5% discount.There would also be some illegitimate offers that offer promos which have huge hidden charges once you've registered. So beware.

But still, there are quite a few online promos which are worth trying. There are a few legitimate offers that give out really huge and wonderful discounts. Just keep in mind that before paying for anything, be sure that you're fully aware of the terms and conditions of the promo. Reading forums about the promo would come handy. Most people would be more than willing to share their experiences - be it a good one, or a bad one.

Would you recommend using these promos? 
I generally would not recommend giving in to these irresistible promos. But there would be some exceptions. If you've been really planning for something (that means it's in your budget), and suddenly it's in the promo, why not try it? Just be aware of the risks involved. Once you fully understand them, you'll be amazed at how much money you get to save.

Once you've found a reliable source of these promos, you'll realize that you're saving a lot of money with them. Just be sure that the purchase has been planned. Take for example a nice dinner with your family. If you've been planning this for months, and you have earmarked a part of your cash for it, feel free to look for promos. But if you're just buying the items just because they're offering huge discounts, then better think twice (or maybe at least thrice) before pulling out your cash.

Credit Cards as Friends

Every person who had the chance to own and use a credit card knows the risks involved in using these plastics. More often than not, those who have problems paying off their debts are the ones who tend to use their credit cards on impulse. This is one of the reasons why many financial advisers discourage using credit cards. But are credit cards really that evil? Should we go and cut these cards and totally forget about them?

The risks of using credit cards.

Because credit cards are very accessible and convenient to use, most people rely on them to make most, if not all, of their purchases. The risk here is you might already be buying something which you cannot afford.

Credit card debts are among those debts with high interest rates. If you are not responsible in using your credit cards, your debts would increase exponentially.

Irresistible offers.

Credit card companies today are urging people to use their credit cards more often. Every now and then, new promos are being offered to card-holders. Even non-card-holders are enticed to apply for a credit card by offering them irresistible deals. For travel, there are “fly now, pay later” schemes offered to those wanting to travel but currently don’t have the cash. For electronics, there are “0% installment schemes” which you can pay for 3, 6, or 12 months without incurring any interest. All of these promos target the very persons who do not have the cash to pay for what they want. The result: more debts for the people, more earnings for the credit companies. 

Make credit cards work for you.

So what makes credit cards our friends? As for me, a number of things. First, I'm into direct selling. I give my customers 30 days to pay for their orders. This is possible because I use my credit card to pay for their orders. Once my credit card is due, they would have already paid me. No cash out made.

Second, every time I use my card, I get free products from different stores. For example, with my HSBC, every time I charge a minimum of PHP2,000, I get a free cup of Starbucks. So what I do is, when I buy groceries, I pay them using my card. Then go to Starbucks, claim my free cup of coffee, then relax for a while. When I get home, I pay the card through online banking. Free coffee for me.

Third, I sometimes get discounts. Yes that's correct. There are some stores that offer up to 5% discount if you use their preferred cards. Buying a pair of shoes using your card sometimes earns you 5% discount. But as I've stated above, once I get home, I pay it ASAP.

Lastly, I earn reward points. Never underestimate reward points. You can get free home appliances just by using your credit cards.

Before swiping those plastics.

Personally, I don’t use my credit card if I don’t currently have the cash to pay for it. It takes a lot of self-control to do this but it's worth it. It's this simple: if you can't pay for it in cash right now, don't swipe it.

Direct Selling (And Multilevel Marketing) as a Side Business

In most personal finance forums I’ve read and joined, people always ask for suggestions on how to increase their monthly income. There would be lots of inputs on how they can do this. I’m really not certain whether these suggestions are taken from their first hand experience or were just picked up from somewhere else. At times, these suggestions lead to debates – most especially when multilevel marketing (MLM) businesses are mentioned.

MLM or networking is bad, isn’t it?
Most people see MLMs as bad. A good number of people label MLMs as scams. These people are often victims of these so called scams. I was once among these people. I’ve promised to never join any MLM after I quit on the first one. I broke that promise, joined another one, quit, then made a promise again. Now, I’ve broken yet another promise, but I know this time, I made the right move.

MLMs are often interchanged with pyramiding scams. What people don’t realize is that MLM is totally different from pyramiding. In MLMs, you earn money by selling items. In pyramiding you earn money by recruiting – that is, you don’t sell anything. But don’t MLMs earn from recruits too? Yes they do, but that’s just a bonus. The main source of income from MLMs is from the sale of the products which the company is offering.

Let MLM work for you.
MLM is a way for companies to market their products. It’s a cheap way for them to advertise what they’re selling. Add to that the huge possibility that they’ll earn money from sales without them selling items first hand. This is good for the company because they aren’t spending much trying to sell their products. Moreover, this is good for the members (some call them dealers, partners, agents) because they earn from what they sell without having to conceptualize a new product.

With MLM, all you need to do is sell the product. If you want additional earnings, go recruit somebody who you think would also like the product. Put in mind though that MLM is not relying on recruiting to have earnings. MLM = Selling. It’s that simple.

Which MLM should I choose?
Pick a company that offers products which you personally use and like. If you’re taking a food supplement and you firmly believe that it greatly improved your health, then by all means, join the company that offers this product. Choose the company in which you believe in. You cannot sell anything you yourself don’t want to use. More importantly, chose something you are confident you would be able to sell. Lastly, choose one in which you can afford. I am a member of one direct selling company where the membership fee is a little more than PHP200.

Are you sure this works?
Yes. To paint a better picture, consider the following notes based from one of the direct selling companies in which I am a member:
The company is selling clothes – one of the basic necessities of every person. They’re also selling bags and cosmetics.
I get 22% discount from every purchase I make. So if somebody orders from me a shirt which costs PHP500, I’m already earning PHP110 from that sale. Imagine if 10 people buy one shirt each. That’s PHP5,000 gross. From that sale, my net income is PHP1,100 .
Aside from the 22% discount I get, I also get monthly rebates of 7.5% - also based from the gross sales. My rebates from the above sale would then be PHP375.
As a bonus, I have one recruit. I also get rebates of 7.5% from the sales of my recruits. Now, assuming one of my recruits was able to gross PHP5,000, I receive PHP375 from that sale.

Overall, I earned (net income) PHP1,800 just by buying their orders. My capital: PHP230 – and that covered my membership fee and the catalogue. The purchases I made were through my credit card. The funny part is, I hate selling. As in, really hate selling. How do I get people to place their orders? I just put the catalogue somewhere they can see it. People would soon notice it then they’ll start browsing the catalogue. After a few seconds, they’ll start asking questions. Eventually, they’ll order a shirt or two. Easy money huh.

Taking Out Loans With Very Low Interest Rates

In one of the forums I frequently read and occasionally comment on, one member asks,

A respectable institution is offering me a 30,000 loan with 1% interest. Should I take it? With the very low interest rate, I simply can't say no.

Although I can’t believe that an institution is offering such a low interest rate, it made me think twice what would I do had that opportunity be given to me. This dilemma of “taking a loan or not” has been experienced by a lot of people today. These lending institutions have been aggressively marketing wonderful offers that are simply too tempting for you to ignore. But before giving in to these offers, carefully analyze your situation. Do you really need to take out a loan? Do you have plans on how to use it once it is approved? How do you plan of paying the loan (plus the interest)?

Analyzing the situation.

Most people grab this opportunity thinking that they're one of the few lucky persons who have been offered this incredible offer. There are various reasons why they agreed to take out the loan:

1. It is much easier to borrow money right now than to borrow money when emergency strikes. I'll use it as an emergency fund anyway. 
2. This loan is offering a much lower interest than my existing debts. I could use it to pay off some debts. 
3. I can borrow money now to start my business. 
4. With this loan, I can buy the beautiful HDTV I've been eyeing for a long time. I promise to pay it off as fast as I can.

All of the four reasons posted above pose some risks. Although the fourth one is the most illogical among them, all four pose some dangers to one's financial status.

Borrowing money for your emergency fund.

Borrowing money for your emergency fund, either to start your emergency fund or add more to it, would be nice. The loan is taken out with good intentions. This would be a good move if ALL of the following are TRUE:

1. You don't have an existing life insurance.
2. You don't have an existing comprehensive accident and health insurance.
3. Your budget will allow you to pay the additional monthly expenses.
4. You have a tremendous self control and sense of responsibility.

Borrowing money to pay debts.

I have already done this in the past years - but I only decided on doing this after studying the details thoroughly. Without borrowing money to pay debts, I would still be in a complete mess right now. Things to consider when you are applying for a loan to pay your existing debts:

1. The interest rate for the loan is much lower than the interest rates of your existing debts.
2. The loan proceeds can pay off the whole amount of your targeted debt.
3. Again, you should have a tremendous self control and sense of responsibility.

Borrowing money to start a business.

The risk in borrowing money to start a business is due to the fact that majority of start up businesses do not go well. If you're just a starting entrepreneur, it would be too risky to borrow money which you will use to invest in a business. There is a huge probability that the business will not succeed (I'm not a pessimist, it's just that my risk tolerance is close to zero) and you will end up with a failed business and an unpaid loan. But if you are confident enough that your business will succeed and you have a high risk tolerance, then go for it.

Borrowing money to spend on non-essential things.

If you are one of those people whose reasoning is similar to this, let me tell you this: I was once like you. Then I got buried on debt. Now I'm digging myself out of that mess I've created.

My suggestion.

If you think that the offer is too good to let it pass and you have something in mind where you could put that money safely then go for it. Personally, if I find a low-risk and liquid investment, I would go for it. If a bank is offering a savings account with say 2% interest (although it really is not an investment), and your loan is at 1% interest, then grab it. Just be sure that you have the strength to fight the urge to withdraw the money and treat yourself to a shopping spree.

The Importance of Setting Goals

Each of us has our own dreams. These dreams encourage us to get off the bed every morning. They help us stay focused on whatever we do. But dreams per se are useless if they remain just as that - dreams.

Achieving your dreams.

Achieving our dreams might prove to be a daunting task to most people. This is because, most often than not, our dreams are a far cry from what we are/have at the moment. Most people who live in poverty dream of becoming millionaires. Those who have been working as employees for a long time dream of becoming their own boss. I myself dream of being able to resign from work and still live a comfortable life.

But why do most of us find it hard to achieve our dreams? I've heard a lot of people give up and stop shooting for their dreams. Many times, people reach the last few years of their lives without even getting close to their dreams.

For us to be able to achieve our dreams, we need to design a clear path which we need to follow. And to guide us through this path, we need goals.

Goals. Goals. Goals.

One of the reasons I've started this blog is for me to be able to put into writing my dreams and my goals. These goals are essentially what guide me towards achieving my dreams. Goals can be easily broken down to short-term and long-term goals.

Short-term goals.

These goals are those which you plan of achieving in the very near future, say in the next 6 to 12 months. Some short-term goals are just for plain personal gratification. But short-term goals should be geared towards achieving your long-term goals. I firmly believe that long-term goals should be kept in mind when setting short-term goals. This way, there would be a clearer path from one's current position to the wonderful dream. For each short-term goal achieved, you will be a step closer to your long-term goal and eventually, to your dream.

Long-term goals.

Achieving long-term goals takes us a huge step closer to our dreams. Once we have achieved all of our long-term goals, our dreams are just a few steps away. More often than not, all we have to do is to wait a little while before our dreams are realized. Long-term goals are harder to achieve than short-term goals. We need a lot of determination and patience in order to reach them. Once we're there, we know that realizing our dreams are not as hard as we thought. 

Start setting your goals.

Without short-term goals, it would be hard to achieve your long-term goals. Without long-term goals, it would be close to impossible to reaching your dreams. If you really want to achieve your dreams, start setting your goals and do everything in your power to achieve them. The best time to start is NOW.

Wants vs. Needs. What Does It Take To Be Happy?

A friend of mine once asked me, "What does it take to be happy?" I came up with this article.

Almost every, if not all, financial blog or book I’ve read touches on the subject of wants vs. needs. You need to clearly understand and define the line between a want and a need to be able to make good decisions. Some self-help books also discuss wants vs. needs. To be truly happy, you need to be contented with what you have.

But what if you really cannot distinguish a want from a need? Or what if the understanding of the concept of “want vs. need” differs from person to person?

What really is a “need”?

The universally accepted definition of a “need” is something that you cannot live without. Something that, if taken away from you, impacts your life in a great way to the point that you can’t live normally. Without your needs, your life as a human being is put in jeopardy. A prime example of a “need” is food. A person simply cannot live without food. He can go for days without food but his health would greatly deteriorate. Without food, he can’t function normally.

What is a “want”?

Conversely, a “want” is something you can live without - something which is not required for you to have in order to live normally. An example would be the expensive gadgets we see being advertised every day. High-end phones, PSPs (and other game consoles), BluRays and the like are all wants. You can live normally without the latest iPhone in the market. You can live normally without those PSPs dangling on your neck every day. More often than not - and most people might object to this, “wants” are those we use for entertainment. More expensive “wants” are those used as status symbols – luxury cars, state-of-the-art gadgets, signature clothes – you name it.

Drawing the line.

Now that we have clearly defined “needs” and “wants”, we can now draw the line between the two. But this is where debates start. To some, your “needs” might look like “wants”. On the other hand, your “wants” might look like “needs” to others. To further complicate things, with each “want”, we can think of countless ways on how to assure ourselves (and the people around us) that these “wants” are really “needs”. There are things that you want so badly that you think of ways and means to make it look like a need. Lip service they say. So how do we draw the line here? Enumerated below are the things I consider as basic needs (and yes, they are not the “basic needs” normally listed by most people). Let’s take a look at them one by one.

Food.

Taking from our previous example, food is a need. With advances in science today, we now have a myriad of choices on food. From food that help in the proper digestion to food that help control cholesterol levels in our body. There are foods that help people fight aging, foods that also help improve people’s physical appearance. So now here’s the dilemma. We know food is a basic need, but what types of food are on the “needs” side? Should we just consume the ordinary foods? Or should we opt to eat those with health benefits – say those that aid in proper digestion. For all I know, proper digestion is a need. Now, there are some foods that are fortified with vitamins. These foods are more expensive than the others. But we need vitamins, don’t we? Some would say that we could get these from other sources, but wouldn’t that be an added cost? Wouldn’t buying these additional things considered as a “want”? No, it’s a need. Really?

Clothing.

For me, this is the easiest thing to consider as a need. As long as you pick the clothes that’ll keep you warm, they’re good. Anything more than that, it’ll be considered a want.

Transportation.

Right now, moving from one point to another entails some dangers. If you browse the news today, you would always find at least one person who was held-up, pick-pocketed, raped or even killed while on the road. Now, putting all those into consideration, would owning your own car be a want or a need?

Shelter.

The way I see shelter, it is similar to what I’ve mentioned for transportation. It all boils down to security. Another issue with shelter would be to rent or own? Should you be contented with renting a house? Or should you buy one? If you can’t afford to buy one, would buying a house considered a want? No. We need to have a house, so it is a need. But should you be contented renting?

Money.

Investments, businesses, work – these are the main sources of money. A few people, those who are really lucky, receive money from their ancestors. But what if you came from a family who earns an income below the average? If you’re constantly working your butt out just to make ends meet, would owning a business be considered a need? Or should you just be contented working and hope that once you retire, the company you’re working for will give you a hefty pension? Think about it. Would a business / investment be a want or a need?

Be contented.

People always tell me to be contented of what I have. But what if I don’t have everything I need? They would tell me these things I consider as my needs are merely wants. To this day, I beg to disagree.

Right now I’m happy. But I’m certain I could be happier. If I have all of my “needs”, I would be happier. Now does that mean I’m not really happy?

Here’s a thought: They say, "Learn to be contented." I say, "Had Thomas Edison been contented with kerosene lamps, he might not have invented the light bulb.”