Financial
Management:
OUTLOOK
STRATEGIES
AND SKILLS
Michael Cañares, CPA, JD, MBE,MSc
MIKOCANARES@[Link]
What i want to PART 1:
FM as an outlook
discuss today.... PART 2:
Strategies to better FM
PART 3:
Skills you need to master
MIKOCANARES@[Link]
If you want to use some of
A
BEGINNING
that cash, you better have a
QUOTE
good story, and you better
be able to justify why you
need to spend it as
concretely as possible.
MIKOCANARES@[Link]
WHAT IS
FM? the strategic practice of
establishing, controlling,
and monitoring all
financial resources to
achieve financial goals
MIKOCANARES@[Link]
STRATEGIC FRAME
MIKOCANARES@[Link]
Are you earning enough?
BASELINE GOAL
10K 10B
Do you begin a month running out of money?
Are you not able to cover your bills?
Do you look at your budget and see that there is nothing left to cut?
Do you use your credit card every month?
Are you constantly worried about money?
RAISING YOUR INCOME
01 Ask for a raise
02 Turn your hobby into a business.
03 Teach what you know.
04 Rent out a room
05 Get a "side hustle"
06 Go back to school.
07 Find a new job.
MIKOCANARES@[Link]
Start to save.
How much are you willing to save per day?
Saving Goals
what it does to your wealth.
1 2 3 4 5
1 PHP PER DAY 5 PHP PER DAY 10PHP PER DAY 20 PHP PER DAY 100 PHP PER DAY
AFTER 20 years.......
Php 7,300 Php 36,500 Php 73,000 Php 146,000 Php 730,000
If your salary is Php 20k a month
• Php 1 per day is just saving 0.15%
• Php 5 per day is just saving 0.75%
• Php 10 per day is just saving 1.5%
• Php 20 per day is just saving 3%
• Php 100 per day is just saving 15%
Standard-wise, you should be saving
Php133.33 per day
LIVING
within one's
means
To live within our means is to
spend only what we are able
to earn after allocating
something to achieve our
savings goals.
Set a budget and don’t go overboard…..
Food Rent Savings Clothing Tithes
Recreation
Be really clear about
the distinction
between needs and
wants.
If they have the latest phone,
you need not have one too.
Pay with cash!
Or with debit card.
A credit card is not extra income!
Cut down on expenses!
Do it yourself!
Basic Accounting Assets
Values
Liabilities
Capital
Revenue
Expenses
• Revenue – Expense = Net
Income or Loss
• Revenue – Savings = Expenses
Some Basic Equations
• Increase in revenues without increase in
expenses improves increases savings
• Increase in revenues without increase in
expenses increases liquidity
Implications of the Equation
Some More Implications
• Constant revenues with increase in
expenses will result to liabilities
• Slight increase in revenues with
large increases in expenses will
result to more liabilities
A Short Personal Assessment
• List down all your assets
• List down all your liabilities
• Compute the difference between assets and
liabilities
• BE HONEST
• Assets – Liabilities = Net Worth
• Current Assets – Current
Liabilities = Working Capital
Some More Basic Equations
• Continuous negative net worth
creates a cycle of debt
• More liabilities with less assets
will eventually end up in
financial bankruptcy
Implications of the Equation
• Investments in fixed assets will
result to poor liquidity
• Investments in depreciable
assets will result to decrease in
net worth
Implications of the Equation
• If cash inflows are less than
cash outflow requirements, a
tight cash position exists.
• If tight cash position exists, the
temptation to borrow is high.
And more….
HOW MANY OF
YOU HERE HAVE
DEBTS?
HOW MANY OF YOU
HERE HAVE INTEREST-
BEARING DEBTS?
HOW MANY OF YOU HERE
HAVE NON-PRODUCTIVE
INTEREST-BEARING DEBTS?
One Primary Thing to
Remember about Debts
When you are
borrowing money, you
are borrowing money
from the future you.
A few rules of thumb
Don’t borrow money for monthly regular expenses.
Don’t borrow
money to buy
depreciable
assets.
Unless amortization cost is equal to
or lower than the cost you need to
incur without the asset.
Don’t borrow money to pay for
vacation.
Don’t borrow
money to pay-off
other debts.
Don’t borrow money
when you can not
afford its future
payments.
If you need to
borrow, make sure
that your loan
agreements are pre-
terminatable.
ARE WE READY
FOR INVESTING?
RULE OF THUMB:
YOU ARE READY TO INVEST IF YOU
HAVE AT LEAST 6 MONTHS OF BUFFER
FUNDS AND YOU HAVE EXCESS MONEY
OVER AND BEYOND THAT.
Unless your rate of return on your investment is higher than the rate of
your borrowing cost.
ANOTHER RULE OF THUMB:
IF YOU HAVE OUTSTANDING LOANS,
BETTER LIQUIDATE THEM FIRST BEFORE
INVESTING.
BUT WHERE TO INVEST? ON WHAT?
WHERE TO INVEST DEPENDS ON HOW
YOU WANT THE INVESTMENT TO WORK
FOR YOU.
SHORT TERM LONG TERM
• Immediate cash • Wealth accumulation
needs
• Temporary asset • Capital preservation
holders
• Regular income • Children’s education
• retirement
What you can potentially consider
• Real property
• Stocks
• Bonds
• Pooled investment mechanisms – mutual
fund, index funds
• Investment in your own business or in a
partnership
WHAT TO INVEST ON DEPENDS ON THE KIND OF RISK YOU ARE WILLING
TO TAKE.
WILL YOU MANAGE IT ON YOUR
OWN?
FOR A START, YOU NEED NOT TO….
If you are confident enough, you
can manage on your own…
THERE ARE A LOT OF OPTIONS OUT
THERE
Key Skills to Master
Strategic Skills Operational Skills
Save Spend
Getting paid for
Changing the
what you are Handling Credit
World
worth
Earn
Living within Exercising
budget Entrepreneurship
Share Invest
6 steps for effective personal financial management
1. Define your current
situation
Translate your current situation to pesos
Analyze your earning and spending habits
Assess your financial health
6 steps for effective personal financial management
2. Define where you want
to go
Start off with what you do not want…..
Look for the positive side of what you would like to
avoid.
Express your goals in “pesos”.
6 steps for effective personal financial management
3. Identify the barriers to
getting where you want to go
Be honest with yourself
Confront your blockages
Invest in your barriers
6 steps for effective personal financial management
4. Develop a written plan
Alter your thinking of money
Set your priorities
Identify critical action steps to implement to move you
closer towards your goal
6 steps for effective personal financial management
5. Implement your plan
Stick to your plan before changing it
Make budgets, reduce your debts,
Save and invest
6 steps for effective personal financial management
6. Evaluate your
implementation
Monitor progress
Master one trick and quick learn new ones
Identify gaps and work on them
ONE FINAL TIP:
GET SERIOUS WITH YOUR TITHES.
One FINAL TIP
Let's make online operations incredibly simple and easy.
Get serious with your
TITHES
Thank you!
