“One cannot and must not try to erase the past merely because it does not fit the present”- Golda Meir

Two things came to my mind upon reading Meir’s words:

  1. The past as we know it, has been documented and told by those who were “left standing” long enough. Others would simply say that “history is written by winners”.
  2. The only permanent thing in this world is change, so why shouldn’t we expect history to change as well? I’m not saying that it’s right, I’m saying it’s how things are.

On February 1944, George Orwell wrote a piece on how history is written by the winners. In it he stated that should his side win the war, they would tell fewer lies than their adversaries. Because the reality, as a TV show protagonist once said is that, “Truth is a battle of perceptions.”

Orwell further added that he would choose the most verifiable among the millions of instances which must be available. But wouldn’t the process of verification also be subject to the particular point of view of those participating in it?

The problem with the past as we know it is that no matter how many “facts” and “objective” measurements we are presented with (eg: the fact that a country had been under martial law, and the number of people who disappeared during the same period), they will always be laced with human perception. Such perspective will always try to slip past our critical and analytical minds, to reach our hearts and stir equally human feelings of either affinity or disdain to the initial observation.

The humanity in us easily makes us forget about the numbers, the facts, the objectivity of the past as we know it. And that is how we end up fighting and sometimes even insulting others- not to establish a fact, but to prove that we are right: that what we feel is THE legitimate and correct feeling, that what we believe is THE thing to believe in… within the uncontrolled realm of social media*, the famous “keyboard warriors” make it seem that suggestion outside of what others perceive is a lie, an idea forced through bribery or worse, a mere invention of creative minds.

Isn’t it sad? that instead of enriching ourselves in debate and trying to learn from an opposing perspective, our discussions on socio-econo-politic and especially in historic topics end up tallying who’s right and who’s wrong?

However, going back to erasing the past to fit the present…

On the one hand, I don’t agree it cannot be done. As a matter of fact, even if what already occurred can’t be undone, those living in the present can still modify data and information bit by bit until the desired effect is achieved. Even in those cases when data can be maintained intact, the interpretation of the said information can still be subject to the analyst’s own thinking (or agenda). So yes, this CAN be done.

On the other hand, no matter how improper it is to erase or alter the past as we know it, well, who doesn’t do it? the human mind is feeble and highly suggestive, while the soul can harbor various motives as well. And so no matter how many registered facts there are, no matter how many recorded events are available, people will always choose to believe what is convenient for them. So, even if it MUST NOT be done, human beings will always serve their best interest at the end of the day and overlook this little misdeed. (In fact, who’s to say that Meir was not guilty of this type of act?)

Dear reader, you might not notice it now but allow me to save you time: everything boils down to resource allocation. 

The “winners” who will proceed to write the story– ultimately turning into history- possess the power to influence which portions of the society get what percentage of resources. These could be time, money, attention, alliances, exposure, etc…

A very good example of this is the passing of the Spanish “Historical Memory Act”. Without embarking on a discussion of its relevance or utility, suffice it to say that this law was able to channel Spain’s limited resources into sectors which would otherwise be left in a state of disremembrance. (Some examples are: the identification and eventual exhumation of common graveyards, granting the Spanish nationality to families of the exiled and the removal of any symbol commemorating the military uprising.)

Due to the very nature of history (or the past as we know it), different interest groups will always resort to revisionism to establish their own version of truth.

This is what’s currently happening in the Philippines, where young Filipinos are being taught that the Marcos regime of dictatorship was the most glorious period of the country. Once again, it simply boils down to resource allocation; this time the resource being a seat in the political arena. For why else would these parties bother to convince a whole generation about the goodness of the former dictator, if not to reinstall his family and allies back to the Philippine politics?

The lesson I gather from this reflection is that we must be very vigilant of the kind of past being insisted as “what really happened”. We cannot and must not change the past what about the rest? we don’t hold anybody’s deeds and desires but our own. Yet, we can exert a small leverage in our communities even as we are neither historians nor big influencers.

Starting with ourselves, we should never lose sight of our past: the past as we were told, and the past as it is currently being recounted. Let us be indefatigable seekers of information, and let us be annoyingly non-conformists with the kind of facts lain before us.

More importantly, let us take ownership of that history. Let’s make it ours: just as we find ourselves to be part of a family, let us also make ourselves part of a town, a country, a global community.

With the knowledge that we have, we can then proceed to inquire, debate and refute any efforts of revisionism that we feel is not right.

Finally, let us exert a massive effort as a community, to reach out to the children- our future. Not only must we pass on to them the gathered knowledge that we have. We must also teach them how to collect the necessary information, where to get it, what questions to ask, to whom they should ask, how they should ask and to never be afraid to politely discuss anything that doesn’t satisfy them.

Golda Meir was a diplomat, politician and the fifth Prime Minister of Israel. Not wanting to question neither her sincerity nor her intentions for uttering those words, it is obvious that she has every interest in wanting to preserve the historical memory from her ancestors. But she was not alone in this task. Ever since the post-war period, every awareness creation effort has been made so that this dark chapter in human history will never be forgotten. And it must be said that this kind of tenacity is admirable, considering how many generations have passed and nobody has ever questioned the integrity of records about the violent pursuit of the Jewish community.

The past of her people, as well as her very own, made her understand the importance of preserving history: to learn from the past as we know it, allowing for hope in the achievement of a greater future.

 

* Social media is a fantastic platform for knowledge-distribution and idea-sharing initiatives.

Sources:

  1. The Economist quotes, available at: https://goo.gl/vWzDx3
  2. “History is Written by the Winners”, by George Orwell, available at: http://alexpeak.com/twr/hiwbtw/
  3. “All People are Living Histories- which is why History matters”, by Penelope J. Corfield, available at: http://www.history.ac.uk/makinghistory/resources/articles/why_history_matters.html
  4. “The Face that Launched a Thousand MiGs”, The Guardian, available at: https://www.theguardian.com/books/2008/aug/16/biography.politics

 

What’s on a reader’s mind (2)

A very dear reader from Canada wishes to share his experience in “adulting” and money management.

However, before I move on to divulge his wise words, let me first mention how I have never met anybody online as kind and as frank as Mr. Edward Hillyer. We met in Facebook. We have a common friend who used to actively publish politically-flavored posts in his wall. It was in the comments’ section where we started out politely arguing about the different topics we enjoy. Now I believe that I may proudly say that we are friends… friends in the sense that I would seek his advice, and he would generously give it; friends in the sense that he would tell me nice stories about his childhood and his family, and I would ask him for more similar anecdotes.

I used to be reluctant in having a social media life but with a great discovery like Edward, I believe it’s worth all the trouble of meeting the weird and creepy people that roam around the internet.

I thank this dear friend for supporting my blog through actively participating in its Facebook page, as well as in my personal page.

I truly hope that you can learn as much from him as I do.

Thank you, Edward!

(The following comment originally appeared in the Colorfulifesite Blog’s Facebook page, dating 6th of February, 2017.)

My first comment on adulating [sic]* and money: If you have ever had a credit card, you will have noticed how a little here and a little there, (ten dollars for a pair on sunglasses, 20 dollars for a new top) will cause your receive your credit card bill with shock. How could just a few dollars here and a few dollars there add up to such a large bill? On the door to my father’s office was a quote ‘It all adds up’. You see this in your credit card bill that shocks you each month. This is the reality, it all (even small amounts) add up. With this knowledge as a given, why not be smart? It 2 +4 = 6, then 4 + 2 also = 6. This information is reversible. If you save a few dollars here, and a few dollars there, IT ALL ADDS UP, just as spending does on your credit card. This is a given. If you save money in your daily life, it will add up.

This was my reply, dating 8th February 2017:

Thank you for this simple yet monstrous truth, Edward. My personal experience with credit cards is quite nil because having been raised in a frugal household; we have always tried to avoid expenses (present and future). We only borrowed money if we didn’t have any other option at all. But I had a similar experience with my day to day life before my husband and I got married. We had good jobs and were living in the city center. So the temptation to get a beer here, have a bite there, etc… was always near. And we would usually give in to the “little” ones, until we realized that the 3x a week trips to have tapas at 2 EUR a glass of beer (we would end up having 3-4 glasses each) would sum up to 192 EUR a month! Imagine how much that would be in a year! So we started to save small coins and also stopped eating out too much. This was one of the ways we were able to save for our wedding (for my part, I was able to save for my dress, shoes, earrings and head accessory). Yes, we’re proud to say that we financed that marvelous celebration of our lives!

In a reply to one of my posts, (this time, in my personal Facebook page dating 22nd February 2017), Edward recounted an advice given to him by his father. Honestly speaking, I wasn’t prepared to be blinded by the light.

I joined Les Grands Ballets Canadiens at 17 years old as an apprentice. I was paid half the salary of a corps de ballet dancer ($75.00 a week). I managed on that fine. It was tight, but I did it. However, after three months with the company, they tore up my old apprentice contract and gave me a corps de ballets contract. I wrote to my father with excitement. ‘My salary has more than doubled. I now earn $155.00 a week!’ My father expressed his pleasure but mentioned… ‘If you got by on $75.00 a week, this means you could now save one whole salary each week.’ What a brilliant observation. However I did not follow his advice. I adjusted my standard of living to my larger salary. I had not ‘adulted’ yet. In youth, there is a tendency to spend all the money we have before our next pay day. It really does not matter what the salary is, we will be out of money by pay day. I was poor, then rich, then poor, then rich, then very, very poor, and now I am financially independent. Like others, I have been through it all. And, I learned from it all. When the endless value of money is recognized, we will prefer the money (security) to the fancy shirt, the latest shoes, the newest gadget and the expensive restaurant. I used to live in a three story house on two acres of land with a swimming pool and three cars for two people. Clearly I had far more than I needed. What do two people do with an acre of land each? Why would two people need three cars? Why would two people need three stories? I was working two jobs and was sick with the work. I felt I needed to reward myself for working myself to the bone. How very stupid of me. I earned $90,000 a year and was always broke before pay day! Now, I have no car, no smart phone, no cell phone, no television, no house, no iPad, no IPod, no MP3 player and no cell phone. What do I have? financial security and peace of mind. The value of this is far greater to me than any material thing.

*Edward’s computer would automatically and stubbornly replace the term “adulting” with “adulating”, and so he spent the whole time with the latter word. Colorfulifesite edited the rest of the typos.

-The End-

Don’t hesitate to comment on Edward’s ideas, or share your own experiences in “adulting” and money management!

Remember that you can write to: colorfulife@outlook.es, or use the Comments’ Section below, or you could also use this blogsite’s Contact Page to tell us your stories. Thank you!

Adulting and Money Management 2.1: The Importance of Research

Author’s note: Please excuse last week’s absence of post. I was not able to better organize my schedule between researching about this article, managing side projects and settling in to our new home. Thank you for understanding. I do hope that the practicality of this post outweighs the lack of publishing several days ago.

This post complements the previous one (Adulting and Money Management 2: “Hooray, I have money! now what?”) that encourages channeling one’s savings into investment.

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Image courtesy of: http://www.vicsrc.org.au/

Introduction: “Adulting” and Research

The term “adulting” was coined to describe a group of people transitioning from youths to adults, associating the latter with a sense of responsibility, commitment, maturity and trustworthiness.

The Urban Dictionary online defines adulting (v) as:

“To do grown up things and hold responsibilities such as, a 9-5 job, a mortgage/rent, a car payment, or anything else that makes one think of grown ups.”

Research (n) has several analogous definitions, but the one I like most is from Dictionary.com:

“diligent and systematic inquiry or investigation into a subject in order to discover or revise facts, theories, applications, etc.”

I identified adulting with research because being responsible usually entails being aware the effect of certain factors, or what elements would be affected once a decision is made. It requires to be informed of the risks, costs and benefits of each resolution or judgement. As you might have guessed, the best way to achieve this is to gather as much information as possible; and if that can be done in a systematic and efficient manner, all the better.

I never really gave much thought about researching until I bumped my thick head to wall after wall of reality. After the 256th bump, I had to admit that INFORMATION IS VITAL (some say it’s power, others say it’s equivalent to money…); but to be more precise, ACCESSING THE RIGHT INFORMATION MARKS THE DIFFERENCE. Unfortunately, there is no short cut to knowing what the right information exactly is. Even if helpful peers point it out, what’s “right” for them might not be right for you. So really, the only way to do this correctly is to start making inquiries yourself.

Nobody ever told me about this- not even my teachers in college. You’d think that people in charge of molding future economically-oriented minds would consider relaying this message…

(Later on when I reviewed some of my notes, I realized how this message was indeed passed on in the form of riddles.)

Research related to investing

Anybody who wishes to get the most out of what he has to offer will not hesitate to gather the necessary data to choose the best option. They  will not stop at believing hearsay, although they will certainly consider that type of information.

Still, there are others who are too trusting, too optimistic, or simply too lazy. Just like me, they won’t be encouraged to be more diligent in researching until they’ve paid the price… because there are several steep prices for overlooking the process of research, and more so when it comes to (first-time) investing. In my case, these are:

  1. Money-wise: (the price to pay will be) the very amount of capital invested
  2. Emotionally: pride that got too bruised, discouraging any discussion about this experience with people who might actually help
  3. Psychologically: being  too traumatized to “trust” any financially-profitable opportunity for quite some time
  4. Opportunity cost-wise: having less less money, lower spirits and inferior resolve to invest once again. This could likely make one miss the chance to make money grow

What to research? How to research?

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Image courtesy of: http://innovationexcellence.com/

Performing an investigative task could be exhausting, especially when not used to it. Although I dare say that having one’s future at stake is surely an excellent incentive to do so.

From my point of view, I see two main aspects of research: the theoretical side (or the understanding) and the empirical side (the practical, “realistic” side). They require a lot of time and effort to be taken on, so you could be tempted to just focus your energy on one of them. But the truth is, both are too important for any of them to be ignored.

Suppose you’ve already decided how much you want to set aside to make your money grow; also suppose that you’re already sure of which type of investment you want to make; let’s also say that you’re currently convinced by a financial manager about the product/s he offers and that you’re very happy with what you’ve heard.

That’s fantastic because it means you won’t have to search for much more. Be that as it may, IT IS NOT THE SAME as not having to research anymore.

Theoretical research

In our proposed scenario, the main question to ask would be: What is the general understanding regarding the investment vehicle of your choice?

Even if you’re already content and convinced about the product that was offered to you, still it’s a good habit to read and re-read the brochure or any related document.

(Depending on the country where they operate) Most financial management companies are obliged to distribute a written communication, stating the product’s fundamental information to potential investors. This is very important because usually this is where the fine print lies.

To make a long story short: you might be interested to find out about the profitability of your venture, the different kinds of fees and commissions you’d be subjected to, how much tax you’d have to pay once you withdraw your capital earnings, what kinds of risks your investment is exposed to, etc… that is to say: by how much would your money potentially grow? How much would necessarily be deducted to your money once you’ve invested it? Is there any way to prevent it, or at least lessen the deductions to your future earnings? 

The second set of questions I suggest to be asked will surely empower those who are afraid of investing what savings they have acquired. It refers to one’s legal rights and obligations: Is there something in your country’s Constitution that would back you up, should you get into trouble (in the case of scams or bankruptcy)? What are your rights (ie: to invest and make your money grow) and obligations (ie: to pay taxes) according to the law? As for the financial services company, what are their rights (ie: to profit from rendering a service) and obligations (ie: transparency, honesty)?

In anything that you do, KNOW YOUR RIGHTS. ALWAYS KNOW YOUR RIGHTS. Consult a lawyer if you have to.

Empirical research

The most effective way to conduct empirical research would be to actually invest the money in your vehicle of choice. Just like a scientist observing a laboratory rat, you could closely monitor your investment with the help of your adviser.

Well, too bad for us- we can’t all have the luxury of “gambling” with our life savings. So for this type of research, I would mainly ask: What has been the experience of other (usually, older) people in this field?

Even if you’re already content and convinced about the product that was offered to you, talking to those who have already invested in the same product or a similar one could help. Most financial managers will hesitate to recount the negative experiences of some of their clients. So consider this: if you ask different kinds of investors (young, old, experts, newbies), they could only be too willing to warn you about not repeating the same mistakes they made. They may not share the secrets of their trade, but you could surely get some useful tips.

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Another important question to ask would be: What are other alternatives available in the market?

This question will most probably be answered by your fellow investors. But it’s always better to do your very own research. Remember that you want the best value for your hard-earned money. It’s not being greedy, it’s being wise. You’re not trying to outsmart anyone, you’re trying to educate yourself so you won’t be fooled.

Try informing yourself of the one or two better alternatives mentioned by other investors. Visit a financial service company’s office and ask all the questions you might have.

Benefits of research

Having done your research does not in any way reduce the risk of losing part (or all!) of your investment. It wouldn’t help you evade taxes either; but the results of your research will allow you to make decisions with more and better information. As a matter of fact, in the case where your decision turned out to be unfavorable, your research would’ve already provided you with enough knowledge that would orient you towards the most fitting solution.

Some might be wary of spending time to do research, even if it just meant comparing the profitability of different investment tools. Others might even think that they would do better investing their money already, instead of spending time talking to fellow investors. As respectable as this stance is, it is not advisable. Especially not to first time investors.

Undoubtedly, as you acquire more knowledge and experience about investment, you would spend less time and energy doing the basic research. By then, you would be informing yourself of different factors concerning other opportunities. You would know better who to talk to about one option or another. The task itself will not disappear, it will just take on a different turn.

Conclusions

People in the phase of “adulting” are automatically more prudent of their resources. Especially when it comes to their hard-earned savings. After all, that is the very essence of adulting: taking on more responsibilities and being more consistent with the decisions that were made.

One way to make adulting go a bit smoother is by taking time to research before going after one option or the other.

Whenever there is money involved, there is higher incentive to gather the right information. This becomes more evident when, along with the chance to make money grow, there is also a risk to lose part or all of it.

In general, there are two important aspects of research: the theoretical and the empirical. Both are equally important because they complement each other. That is to say, one cannot only mainly rely on hearsay when making an investment decision. And articles that are written in books, journals or magazines do not always play out the way they are supposed to. So one’s best bet would be to do both.

For the theoretical aspect, it would be wise to consult the documentation available in any financial services company. It is also highly advisable to be aware of the legal obligations and rights of both the investor and the investment company before establishing a financial relationship.

As for the empirical aspect, potential investors (especially the first-timers) would do good to talk to other investors. The latter group may not share their secret formula for success but they could warn about common mistakes and how to look out for scams. Lastly, it wouldn’t hurt to know what are the different alternatives that could fit an investor’s profile (those that adapt well to his current situation and future needs).

Researching wouldn’t make the risks go away. It wouldn’t lower the fees and commissions to be paid. Additionally, it doesn’t only take time and effort: some would also say it will make them miss the chance to invest immediately, thus losing money in the process. This type of opinion is respectable, but in the long run it will always prove to be worthwhile to exercise patience and diligence. Most people realize this too late along the way.

-The End-

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Adulting and Money Management 2: “Hooray, I have money! now what?”

To read the first part of the Adulting and Money Management Series, click here.

Money management becomes tricky as we grow older. To prove my point, try to remember when you were younger and you used to be so determined and focused to save whatever money you had. It could be to buy “that shirt”, “that book”, “that pair of shoes”, or even just to “put it in the bank”.

Didn’t you use to scrimp on buying snacks at school? didn’t you keep those envelopes containing cash- from your godparents- so you wouldn’t be tempted to use it? didn’t you try to outsmart your parents, siblings, or other family members to cover some of your expenses so that you could have more money, faster?

By the time we enter into adulthood, we start to be distracted from goals such as saving money or even increasing our income… There are just so many nice things to buy, a lot of delicious new food to taste, and look at all those places where we could travel- am I right?

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Image courtesy of: http://www.jocelynrish.com/

I don’t have the capacity to address all the above-mentioned concerns. However today, in the name of “adulting”, allow me to shine a spotlight on investment as an alternative to increase the money you have saved. And as a possible choice for investment, this post will also include a short discussion about Mutual Funds.

The completion of this second part of the Adulting and Money Management Series would not be possible without the very dependable Mr. Arnel Martil. His professional aid/opinion/words/common sense/truthslaps have truly made this post not only satisfactory, but also very beneficial to the reader.

Thank you very much, Arnel for your help!

-*-

Colorfulifesite (C): Arnel, what’s the difference between saving and investing? Which would you say is more important between the two? For instance, let’s say that I just received an inheritance or a huge bonus. Which should be my priority?

Arnel (A): The big difference between savings and investments is time.

Savings is usually money you set aside for short-term goals.

One reason you might want to save now is so you have some money to invest later. Money deposited into a savings account is usually very safe but would only earn a small amount of money in return. Another great thing about a savings account is you can get your money out of the account whenever you want.

When you say saving, you are just putting your money in a bank or as a reserve. It’s as if you’re hiding it under your pillow. It is a “parking place” where the “principal” or the amount you’ve saved is safe; it provides money for short term goals as well as emergencies.

By investing, you allow your money to grow. 

It accumulates money for long-term goals. You could lose your principal, but you have the opportunity to earn more money.

When you invest, you set your money aside for future income, benefit or profit to meet long-term goals. When you invest your money, there is no guarantee that your money will grow or increase. The earnings or losses from investments are usually more than what you would make or lose in a savings account. Investors recognize that it usually takes a long time to earn the big bucks, so most of the time they are in it for the long haul.

C: What would you say is the NUMBER ONE enemy of the people who are currently saving money? What’s the most effective technique you’ve applied to make sure you or your family could save?

A: Inflation is one of the downsides if we rely only on saving. It is an increase in price that makes a “market baskets” of goods and services more expensive over time- a silent killer of your finances. (Note: inflation reduces the value of your money because with the same amount, it can purchase less goods and services than before.)

For us to beat inflation, we should invest in investment vehicles like bonds, stocks, mutual fund, UITF or Unit Investment Trust Fund* (see Glossary at the end of the article for more information on terms with asterisks), or real estate. As an adviser, we do not discourage saving money in a bank account because you can recover and use that money 24/7 in case of an emergency. But if you want something for long term, like if you are planning for future education or personal retirement, invest in a vehicle that allows your money to grow if done right… annual returns of 50% is possible.

Regarding saving techniques, it really depends on the person’s budget; it should be such that his lifestyle wouldn’t be compromised. 

C: The most typical advice is the 20-60-20 rule, where 20% of a person’s income should go to savings and investment, 60% on essential expenses and 20% on discretionary expenses a.k.a. wants, rather than needs. (For some insight on budgeting and saving, see Colorfulifesite Blog’s post on making ends meet, here and proving that you could save, here.)

A: Just remember that the bottom line is saving for your future.

C: Suppose I’m now ready to invest- will it make sense for me to borrow the money I would put in the investment vehicle of my choice?

A: As an adviser I would say, before you decide to invest, you should settle your debts first.

You must start paying off the ones with small interest, and little by little, proceed by paying loans with bigger interest. The reason for this is you might have difficulties if you prioritize the debts with bigger interest, because there’s a tendency it might be too much for you and it could lead to you not being able to continue paying.

Once the debt is settled, you can then start to save and invest.

C: In my opinion, borrowing money can be a useful tool for money management. But it can also spell disaster for anyone who misuses it. Under the context of making your money grow, I believe that it only makes sense to take a loan when:

You are 100% sure that you could pay it off, interest plus principal, without sacrificing neither your current lifestyle nor your future prospects. (More of this on this series’ next post!)

A: You can be financially independent at any income level, but one should develop a certain behavior and discipline when saving and not to spend too much. However big your monthly salary is, even at 100 thousand per month, if your mentality is all about spending and spending, the end result will be an impoverished you.

C: Now, I noticed that mutual funds have been “a thing” for quite some time. What can you tell us about it?

A: Mutual funds are pooled investments which everyone can participate in. In the Philippines, it could be with capital as little as Php 5,000.00 (Colorfulifesite advises for you to consult your bank or financial adviser for the minimum capital requirements in your country).

It is a good investment option because they do not require much effort and time compared to others (e.g stocks, one’s own business). A professional fund manager handles your mutual fund. All you need to do is put in the money. In a mutual fund, you will become an investor, part-owner or shareholder of blue chips- nationally recognized, well-established and financially sound companies- where a mutual fund company has invested in.

Where I work, or in any mutual fund, historically in 5 years’ time, investment has been seen to double.

That’s why, we advice to lock in 5 years if people want to invest in a mutual fund.

C: I guess the time has come for me to share my own investment experience. You see, I invested a little money that I had before. Just like in a mutual fund, I was asked to lock my capital for a minimum of 5 years. I could put in more money, but I couldn’t withdraw it until after that period. However, when time came for me to recover my investment, I simply got the capital back! I was told by my adviser that it was due to the financial crisis. Now, what was I supposed to do with that? Of course I was happy I got the whole of my capital back, that I didn’t lose any money. But what a waste! I could’ve invested it in another product and at least earn 5% from it.

A: Maybe the investment you did at that time had an insurance added-on.

There is a product called a VUL** or Variable Universal Life Insurance where, aside from saving for your future your principal earns interest and it offers protection. It’s a sort of 2 in 1 product: life insurance ***plus mutual fund.

It is also a good investment since the money you save will grow and accumulate. The advantage of investing in any VUL products is it offers insurance or life protection, so in case the family breadwinner or the income generator has suddenly run out of time, his remaining family members would not suffer.

May I ask which company you invested in? How come the result was only a break even after 5 years?

C: The truth is, I remember which company it was, but I don’t remember the conditions. I think the problem was, I didn’t take it too seriously at that time… (facepalm)

A: Before you choose any type of investment, you must first do a background check of the company: their historical performances, how many years have then been operating- is it at least 10 years or 20 years?- so you could avoid scams. There’s no investment where you could earn money speedily, like let’s say, double your money in 2-4 weeks. There is an investment principle where we are advised to apply the RULE of 72****.

C: What can you say about my experience? Or worse, what can you say to those who lost money in their investments? Undeniably, many people are afraid of investing, and are afraid of the term “finance”, due to the crisis that hit us…  

A: As an adviser, I would say that before entering any investment scheme like stocks, mutual fund or UITF, you should first build the foundation of your investment by securing a life insurance, because the return on the investment tools I’ve mentioned is not guaranteed… In the case where a person secures a life insurance, if something happens or let’s say he or she will be “taken out of the picture”, there’s assurance for the surviving family members or beneficiaries that they wouldn’t be burdened or worried about how to go on with their financial life.

Life insurance could also help pay loans and other liabilities. It could be used to fund obligations like college education, car loan, house or lot… at least there will be money to pay them off. If the insured breadwinner dies, at least there will be resources to supply his surviving family’s needs.

C: That is a very interesting concept you introduced there, Arnel. In fact, an article I read explained it like this: When you don’t have assets built up (as young people do in their early-work life), you are most vulnerable. In case of an emergency, your family will have nothing to fall back on. So a life insurance is a good way to provide financial protection to your family even in your absence.

In another article, I learned that one of the wealth-building strategies we didn’t know about is to incorporate the use of whole life insurance as a strong basis for a solid investment plan. In fact, Investopedia defines this just the way you explained it:

Whole life insurance is a contract with premiums that includes insurance and investment components. The insurance component pays a predetermined amount when the insured individual dies. The investment component builds an accumulated cash value the insured individual can borrow against or withdraw.

A: If your investment of choice includes an insurance feature, it’s hard to say that you end up “losing” or “earning less”. There’s a guaranteed face amount***** or insurance amount in case of death, plus you can avail of riders****** or additional benefits like critical illness, hospital expenses and disability benefits. You could benefit from it in the long run.

C: Going back to my mishap… Needless to say, my experience made me afraid to invest again. So I just keep my money in a bank. However, it does make sense to also invest some of it especially if I were to increase the value of my money.

What are my other options? I’ve thought about bonds and stock options. But the truth is I know nothing! What advice could you give me?

A: All investments involve taking risk. It’s important that when you go into any investment in stocks, bonds or mutual funds you have a full understanding that you could lose some or all of your money in any one investment. There is really risk in investment, and there’s no guarantee.

It is often said that the greater the risk, the greater the potential reward in investing, but taking on unnecessary risk is often avoidable. An investor’s best alternative to protect themselves against risk is by spreading their money among various investments, hoping that if one investment loses money, the other investments will make up for those losses. This strategy, called “diversification” which can be neatly summed up as, “Don’t put all your eggs in one basket.”

Once you’ve saved money for investing, consider carefully all your options and think about what diversification strategy makes sense for you.

Diversification can’t guarantee that your investments won’t suffer if the market drops. But it can improve the chances that you won’t lose money, or that if you do, it won’t be as much as if you weren’t diversified.

Just don’t put “all your eggs” in a bank because imagine if you have 2 million Philipine Pesos (Php) saved in a bank then all of a sudden, it gets bankrupt. Take note that the maximum loss that could be covered by banks in the Philippines is 5oo thousand pesos…

Or suppose that a depositor has millions of money in a bank during times of economic and financial uncertainties. Imagine if the bank discovered that the depositor died- accounts will automatically be frozen, no cash withdrawal could be done and to top it all, the money is subject for estate tax. 

I must say that it would be the main difference between investing in a bank or in a financial services company like where I work (he he): one advantage about investing in a financial services firm is that the client has the possibility to choose that all proceeds may be free from whithholding and estate taxes. Unlike in banks, where the gains an investor acquires are subject to those two taxes, aside from the “normal” ones the government would require.

This is not to discredit banks, but just to put things in perspective with your readers.

C: Let’s say I finally dare to invest in mutual funds. Should I also diversify according to my objectives? For instance, I want to save for a down payment to buy a house? Or I’m thinking of saving for my son’s college education? That’s already 2 objectives.

Won’t I end up paying more than I should, or in other words: won’t I end up earning less than I could? 

A: The answer depends on when you will need the money, your goals, and if you will be able to sleep at night if you purchase a risky investment where you could lose your principal.

For instance, if you are saving for retirement, and you have 35 years before you retire, you may want to consider riskier investment products, knowing that if you stick to only the “savings” products or to less risky investment products, your money will grow too slowly—or, given inflation and taxes, you may lose the purchasing power of your money. A frequent mistake people make is putting money they will not need for a very long time in investments that pay a low amount of interest.

On the other hand, if you are saving for a short-term goal, five years or less, you don’t want to choose risky investments, because when it’s time to sell, you may have to take a loss. Since investments often move up and down in value rapidly, you want to make sure that you can wait and sell at the best possible time.

Time is money.

As we would say in my company, “The best time to invest was yesterday, the next best time is today. And the worst time is tomorrow. Because sometimes tomorrow becomes never.”

-The End-

Mr. Martil is a financial adviser in a leading international financial services company. He is a loving husband and father to his family. Likewise, you were able to witness what a kind and reliable friend he is- generous enough to spend time with Colorfulifesite Blog and answer some of the very basic questions about investment and mutual funds.

Glossary:

*UITF- Unit Investment Trust Funds (UITFs) are ready-made investments that allow the pooling of funds from different investors with similar investment objectives. These funds are managed by professional fund managers and are invested in various financial instruments such as money market securities, bonds and equities, which are normally available to bigger investors only. (Source: http://www.bdo.com.ph)

**VUL-Variable universal life insurance (VUL) is a form of cash-value life insurancethat offers both a death benefit and an investment feature. (Source: http://www.investopedia.com)

It is a life insurance policy that combines the features of variable life insurance and universal life insurance. Where the former constitutes a fixed premium insurance policy that provides a return based on the income performance of an investment portfolio. While the latter combines the benefits of an adjustable premium, adjustable coverage term life insurance, and a savings account. (Source: http://www.businessdictionary.com)

***Life insurance- Insurance cover that serves two major purposes: (1) to substitute for the insured’s income if he or she dies, and (2) to qualify the insured for favorable tax treatment. The policy holders buy insurance cover from an insurance company, and pay specific periodic amounts (premiums) for the term (duration or life) of the policy. If the insured dies before the this term is completed, a guaranteed sum (the face amount of the policy) is paid to one or more named beneficiaries. If the insured survives the term then, depending on the type of the policy, he or she may receive the full or a part of the face amount of the policy. (Souce: http://www.businessdictionary.com)

****Rule of 72- The “rule of 72” is a simplified way to calculate how long an investment takes to double, given a fixed annual rate of interest. You divide 72 by the annual rate of return you receive on your investments, and that number is a rough estimate of years it takes to double your money. For example, $1 invested at 10% takes 7.2 years (72 divided by 10) to turn into $2. (Source: http://www.usatoday.com)

*****Face amount- Sum of money for which an insurance cover is obtained, usually shown on the top sheet (face) of the policy. In life insurance, face amount is the sum paid on the policy’s maturity date, on the death of the insured, or (if the policy terms permit) on his or her total disability. (Source: http://www.businessdictionary.com)

******Riders- Additional clause, document, or slip of paper that adds, alters, amends, or removes the provisions of an associated or attached agreement or contract (such as an insurance policy) or a negotiable instrument. (Source: ww.businessdictionary.com)

Sources:

  1. Investopedia
  2. Business Dictionary
  3. “How Do You Make Money from UITF Investing?”, by Fitz, Ready to Be Rich Blogsite, available at: https://fitzvillafuerte.com/how-do-you-make-money-from-uitf-investing.html
  4. Unit Investment Trust Funds, available at BDO website: https://www.bdo.com.ph/personal/trust-and-investments/unit-investment-trust-funds
  5. “Doubling Your Money: The Rule of 72”, by Wes Moss, Advice IQ, USA Today, available at: http://www.usatoday.com/story/money/personalfinance/2015/04/25/adviceiq-doubling-your-money/26339307/
  6. “The #1 Wealth Building Strategy You Don’t Know About”, by Paradigmlife Blogsite, available at: http://paradigmlife.net/blog/the-1-wealth-building-strategy/
  7. “Are You Building a Strong Foundation for Creating Wealth?”, available at: http://www.firstpost.com/investing/are-you-building-a-strong-foundation-for-creating-wealth-2682980.html

Adulting and Money Management 1: “I’m poor, I can’t save money”

The contents of this article are derived from the article, “Ahorran los Pobres?” authored by MJ. (For more information about savings, investment and entrepreneurship, please check the website: Dineromio at http://dineromio.com/)

This is the first part of Colorfulifesite Blog’s series of articles about “Adulting and Money Management”

As I finished reading the original article, I immediately imagined a very practical conversation between Colorfulifesite Blog and Dineromio Blog- or at least between me and MJ. It went like this…

Colorfulifesite (C): I can’t save money because I’m poor.

Dineromio (D): Of course you can!

C: How? Do poor people save money?

D: Yes!

C: Wow! you’re really confident with your answer! What’s your basis for being so sure about this?

D: I had the chance to work as a volunteer in a training workshop involving financial education. It was aimed towards adults who find themselves under the risk of social exclusion. Basically, we’re talking about people who survive with government subsidies worth 400 Euros (Eur) monthly, in a city where the minimum salary is more than 650 Eur, BUT the median salary is 2,200 Eur and the most common amount earned is around 1,100 Eur per month, after taxes.

C: So, if we analyze the income of the group you worked with: the participants of your workshop were earning ONLY 69% of the minimum salary, 36% of the most frequently earned amount and barely 18% of the median salary. Interesting…

D: I know it’s not Baghdad but let’s put ourselves within the context, which would allow us to understand how it is to live with 400 Eur in a city where the standard of living is designed to cost 1,100 Eur.

Our objective is quite ambitious: we wanted the participants to identify opportunities to save money and to manage their squalid earnings to the best that they could.

C: What was the initial reaction of the group?

D: At first, the very mention of the word “savings” produced so much rejection: people squirmed in their seats and there were even some who either laughed ironically or who were annoyed. It seemed to them that the mere idea of making them want to save was insulting.

Resultado de imagen de how to save money if poor

Image courtesy of: Lendbox twitter page

The activity proposed the following dynamics: 1) sharing of ideas and advice from the workshop participants’ own experiences, 2) handing out tips on how to lessen expenses in transport, telephone bills, automatic teller machine commissions, etc and, 3) a practical exercise consisting in drawing up a weekly budget (which is the foundation of any change you might want to start in your life)

Except for a few number of cases (approximately 10% of the participants were in dire conditions and suffered from depression and anxiety), the rest of the group were able to detect small changes which would allow them to save “something” on a monthly basis. And such “small changes” could be anything ranging from purchasing generic-branded medicines to starting a small business.

C: This is INDEED encouraging!

D: I read an article by de Boza Chirino, José y José I. Zabaleta. In it, they pointed out that many people belonging at the “base of the pyramid” (that is, the income pyramid, where people who are at its base could be earning as low as 2 USD per day) build their savings IN KIND: a hen to maintain until the time comes for the family to buy medicines, a cow to take care of until school starts (when tuition fees have to be paid)…

What I’m trying to tell everybody is this:

EVERYBODY CAN SAVE. THE KEY IS TO HAVE SOMETHING THAT MOTIVATES US TO DO SO.

C: I actually remember my grandmother buying jewelries and then saying that it’s an investment, in the sense that she could sell them in case of an emergency.

D: I’m going to share with you a small list where I listed different alternatives to start build microsavings (the type of savings accumulated by the people at the base of the pyramid). These are the most frequently-used ones nowadays. I also included their advantages and disadvantages:

1. Informal savings made through family members, friends, “informal” money collector, hiding money under the mattress and savings in kind.

Normally, the person who wants to save requests a family member or a friend to safeguard his money so he won’t have any “temptation” in his own home. Sometimes, he also makes small investments like buying a hen or a goat, which he could later sell.

The main advantages are: the money’s immediate availability (although this is not always the case), as well as the fact that other people manage the risk of keeping money.

The main disadvantages are the high costs and risks this type of savings entails, such as loss, theft, or systemic risks that affect the whole community caused mostly by natural disasters.

Resultado de imagen de poor people saving money

Image courtesy of: http://www.theguardian.com

2. Rotating Savings and Credit Associations (ROSCAS) are composed of a group of individuals that fill the role of an informal financial institution through repeated contributions and withdrawals to and from a common fund (Investopedia).

Joining this type of association gives high incentives to save, and the members are confident of its strict organization and administration.

The disadvantage is that it can be costly due to its strictness in its rules and regulations; members are also faced with the possibility of the group’s dissolution before having been able to receive the lump sum rightfully theirs. ROSCAS are also susceptible to losses, robbery and systemic risks.

3. Last and not the least, we  always count on banks or Microfinance Institutions where we could open an individual savings account. Banks’ services are highly demanded due to the security it offers, as well as the stability of the organization.

However, the monetary costs (in terms of fees and commissions) are high incentives to NOT save. Also, the geographical location of banks may discourage potential savers because of the need to travel just to be able to deposit a certain amount…

C: Thank you very much for sharing your experience. I’m pretty sure this imaginary conversation of ours has already done its job to inspire our reader to save money. Would you happen to have any tips to make saving less “painful” than how it sounds?

D: Yes, but that would occupy another whole post!

C: I’ll advise my dear reader to keep in tune, then…

Resultado de imagen de saving money is not painful

Image courtesy of: http://www.lifehack.org/

On Opportunities and Other Lessons from Wile E. Coyote

Opportunity (noun / op.por.tu.ni.ty / \ˌä-pər-ˈtü-nə-tē, -ˈtyü-\)

  • a favorable juncture of circumstances
  • a good chance for advancement or progress

See original image

Image courtesy of: Wikipedia

A little flashback…

Wile E. Coyote- the most hard-headed, stubborn, and pathetic cartoon character that I knew of. I didn’t care much about him when I was in my pre-teen years. I was all about the Roadrunner who I considered the fastest, smartest and coolest looney toon (right after Bugs Bunny). 

Everything changed when I went to Spain. Oh, how the Spanish loved the Coyote! (Just as they love Tom more than Jerry, or the fact that they feel more sympathy for Elmer Fudd than for Daffy…). It took me a while to understand their perspective but it was only lately that I began to fully appreciate Coyote.

Exactly several weeks ago, I started to entertain different side projects and I reflected on how this character always saw the glass half-full. Only then did I really see him under a different light- the most determined, creative and hard-working animated creature I have ever seen.

Introduction

Finding a job is generally hard, or at least not easy. Ask anyone unemployed and most probably they’ll give you the same answer, “The company’s not hiring”, “The firm’s actually laying people off”, “I can’t renew my contract because the department has no budget”, et cetera… Added to that is the fact that more and more people are better educated, more highly trained and some of them are willing to settle becoming underpaid just to have a job.

All of these challenges multiply to 20 times more difficult in Paris, under normal circumstances. It should come as no surprise, considering it’s a big city. It houses many international companies who daily face 10,000 times as much qualified people fighting to work with them.

Given the economic crisis/slowdown (whichever makes you feel better), it becomes 100 times extra harder to even land on an interview with the recruiters!

Thus, the day it finally dawned to me that I’ll never get a job in Paris, I stopped all kinds of activities related to job hunting* such as: checking job sites for vacancies, tweaking my resumé, and writing alternative versions of my cover letter.

What I did instead was to meditate on my situation and watch some cartoons. After enjoying a several episodes of the Looney Toons, I started to think about Wile E. Coyote’s unrelenting attitude about catching the Roadrunner.

Following are the lessons I picked up.

Lesson number 1: Change your game plan.

Ironically, the first lesson is something the Coyote never applied in his own life. For years and years for as long as I can remember, he would always resort to dynamites, bombs, anvils or other heavy objects and booby traps to catch the Roadrunner. Not once did he ever think to change his strategy. (For instance, he could bribe corrupt traffic policemen to arrest the other for over-speeding and he can have the bird handed over to him in jail.)

In light of this mistrust towards change, we should not wonder why the famished canine never got roasted Roadrunner on his dinner table.

Back in the real world, I realized how all this time I had done nothing but follow the same routine: look for a job, apply for an interesting vacancy that suits my qualification, tweak my resumé, tweak my cover letter and wait for their response. I believe the only change I incorporated in the last two years is re-sending my application after 15 days of not hearing from the company. This is not so bad. In fact, this is the way people normally find livelihood. But in 730 days, all I got were 5 job interviews.

Immediately, I became aware that I actually have to do something more productive- something that would actually turn in better results. So instead of looking for jobs, I started to look for opportunities- to showcase the quality of my written work, to build contacts, to reconnect with friends and peers from the past, to learn about other fields similar to mine, to discover different fields that have nothing to do with my expertise, to see what others are doing and to be inspired with what pioneering people are developing around me.

Perhaps I could liken my opportunity-seeking efforts to that of sowing. One sows a seed, tends to it, nurtures it and does all that it takes to produce a bountiful harvest. In the same way, I have this blog where I could practice and improve my writing and researching skills. Likewise, my social media activity has granted me access to dynamic people who have very interesting stories to tell, and who have allowed me the privilege of interviewing them. Although, it must be said that none of these transpired in a day.

As it is, this leads us to the second lesson…

Lesson number 2: Do be patient.

Exercise patience in practice- not in speech, not in theory, not in your mind, not as a “what if”.

How many times have we seen the Coyote go after the Roadrunner again, and again, and again until we get tired and turn the TV off without being told to? And during those times when we would watch him go at it yet once again: how often would we see him assembling traps, studying blueprints, constructing weapons? Then after having prepared his equipment: how frequently would we catch him hiding behind a cactus, a boulder, fitting himself into the form of a telephone pole while waiting for his prey to pass by?

Just as the Coyote worked hard to ensure that his ACME materials would work and that the bird would sooner or later pass his way, so does the farmer. For he is certain that he will gain something from what was sown. He also knows that for him to be able to gain anything, he would need TIME to do its work.

Not all that I have sown bore the fruits I expected and there were instances when the seed even turned to be a bad one. Yet I had no way of knowing until it was time to know. I was in no position to rush anybody or anything. Waiting is as much part of any process as the more active tasks. The key is to learn how to wait.

Lesson number 2.1: Learn how to wait.

This is something I had to learn from my own experience because unfortunately, not all of my “targets” move as fast as the Roadrunner.

The best way I learned how to wait is to make sure there is nothing left pending on my to-do list. Why not take a look at yours?

After marking every item with a check, proceed to ask yourself these questions: When did you last visit your dentist? Have you talked to your grandparents lately? What about that coffee date you keep on postponing with your former office mate? It may seem absurd now, but in keeping yourself active you won’t notice whether time is flying fast or slow.

The second best way I spend my waiting time is observing my surroundings. With the internet, I can do this not only beyond my doorstep but also across national and continental borders. By doing this, who knows what other opportunities are waiting to be unlocked?

Lesson number 3: Every result is a valid result.

In this case, the word VALID is not the same as DESIRED. 

Notice how in scientific experiments, all types of results are noted down (if you did an Investigatory Project in high school maybe this will ring a bell). If there is enough occurrences of such outcome, it will be factored in drawing conclusions. Why is this? because we can always learn from the past, and there’s no better way of reviewing it than taking detailed notes.

Do you remember what the Coyote would do if the giant slingshot didn’t get him close enough to the Roadrunner? what about when the canon literally backfired on him? or that time when the rocket took him too far away? He would just keep on trying new equipment until he finds himself fallen in a ravine, crushed under a ton of boulders (or an anvil).

I never take any failure for granted. I write down everything I could describe, all that I could remember and I try to consider them the next time there is another opportunity to seize.

Once I started applying this principle, my motto has since become…

Lesson number 4: No stopping (No detenerse, in Spanish)

Mr Coyote never stopped. He just kept on running and chasing after the bird even if he already hit a wall.

Do you recall how he dealt with the situation after hitting a wall? Aside from smiling at the stars and birds that circled around his head, he would paint a door, a tunnel or any type of passageway that would allow him to cut across that roadblock. 

Lesson number 5: Create opportunities for yourself.

After more than half a year of searching for opportunities other than a 9am-6pm job, I realized I had to do something more and something better. By that time, I have surrounded myself with a fantastic community of entrepreneurs, professionals, freelancers and different types of passionate people who were already giving me various ideas.

From them I learned that just like the Coyote, it is possible to create a door or a path for us to follow. The end is not the end, unless we want it to be.

Frequently, we take the already downtrodden way because it is the safest option. But truly, risks are contained in any decision we make, including when we stay undecided. Having an employment contract is financially less riskier than not having one, that’s for sure. The thing is, everything entails a risk: even signing on a “permanent” job has the risk of being dismissed. If we didn’t want to be in danger of losing it, then we shouldn’t take the job in the first place- is that how we should view life? I’m not suggesting to jump into any venture with eyes closed. Perhaps the solution is not so much to avoid risks but rather learning how to manage them. As the Spanish would say, “Quién no arriesga, no gana” (Nothing risked, nothing gained).

Do you know what the good news is? The good news is that should you decide to build your own lane and find yourself facing a cul-de-sac, you may always go back to pursue the tried and tested trails.

If we truly wish to move forward then it wouldn’t matter whether we crawl or run; it matters that we keep going (thank you, Doctor Luther King).

People who create opportunities gift themselves the chance to achieve excellence.

This is not to say that the road you will construct will be a smooth one. It never was the case for any of my auspicious friends and peers. But by letting their own selves be the engineer, contractor, builder, supervisor and financier of their ambitions, they all took the necessary preparations to face different kinds of risks. Most importantly, they worked hard and consulted with experts on their fields so they could learn how to manage those risks, in case they turn into reality.

Once or twice an impulsive plunge was taken or a hasty decision was made, yes. Then there were times when certain events were so unexpected, they didn’t even account for as risk (like a terrorist attack). Still, they went on. Most of them might not know it: but in striving to succeed, they have achieved excellence. You might be wondering how I knew this. And just to be clear, I did not have a peek at their bank accounts nor did they tell me their net earnings per year.

The excellence I speak of is being materialized far beyond any of their material possessions. The excellence I have in mind is the kind that is reflected not only in the product of their hard work (ie: a product, a service, a deliverable or a client feedback)- it is also mirrored in their speech, their actions and their intentions. For these people, excellence ceased to be a goal and has become a way of life.

Conclusion

It’s been two months since I had the realization of my need to do something more and do something better, other than simply looking for job vacancies and applying for them. I did stop the job hunt for a while, especially because I needed to meditate on what my next move will be.

At the end of the day (or week) I still look for a paid employment. The difference this time is I have become more selective, and I never fail to mention my other endeavors in the applications.

Truth be told, the time I took off the routine helped a lot; taking another course of action proved productive for me. For example, the moments I spent working on my blog doing independent research and writing have given me a certain level of exposure. Thanks to that, I am able to gather a portfolio of work which includes: drafting, analyzing, researching and translating in all the languages I speak. Now I am also more open-minded towards applying for other types of jobs besides the usual ones.

At the same time, I’ve connected with many interesting people who are currently teaching me and sharing their experiences with me. Some of them are even allowing and inviting me to collaborate with their projects!

The sudden burst of activity has become a training ground for me to exercise patience and learn from mistakes. Besides, being in constant motion only convinced me not to stop advancing my personal venture. Above all, I believe that I am creating opportunities for myself and for others. Knowing this gives a more meaningful purpose to every task I perform- to develop something that would serve not only my interests, but that of others as well.

However, no amount of patience, learning, motion and creation could guarantee goals being reached. During my short time in this uncommon scheme, I learned that perfect planning does not always translate to the projected outcomes. Whenever this happens, one’s patience is tested even further but simultaneously, more lessons can be learned, other doors can be opened and the most surprising opportunities could arise.

Lastly, it is worth mentioning the fact that the Coyote still hasn’t got any wins to prove his worth as a role model. Even so, at least his patience and perseverance make him one very admirable villain.

 

 

*My particular, personal circumstances are allowing me the luxury to do this. I do not mean to be insensitive towards other people who are forced to being underemployed and underpaid to support their families. I am also in no way encouraging the unemployed to stop looking for job opportunities and simply “go ahead with what they feel like doing”.

-The End-

Sources:

  1. Merriam-Webster online dictionary, available at: https://www.merriam-webster.com/

Three (of the many) reasons to question Wonder Woman’s appointment as UN Honorary Ambassador

Back in college, a classmate asked me what I thought of Isabel Preysler. I shrugged my shoulders in response. I mean, for sure the lady’s a fine one but she was simply outside the realm of my consciousness. I asked her why she asked me that and the answer I got was, “Well, seeing that you’re a Filipina you must be very proud that you have that kind of representation here in Spain”. I burst out laughing. And then snorted twice. My classmate looked offended so I tried to save the conversation by saying, “Sure, why not? I mean she’s not a serial killer, so I guess it’s not all bad”. Awkward.

Introduction

One week ago, various online news sites reported that the United Nations (UN) have announced that their new Honorary Ambassador for Gender Equality is Wonder Woman. This might have easily been one of those hoaxes posted in Facebook or re-twitted by a friend. Unfortunately, the news is real. There was even an appointment ceremony held at the UN Headquarters in New York.

This is not the first time the organization has tapped fictional characters to raise awareness on different causes. Winnie the Pooh was appointed Ambassador of Friendship in 1998; Tinkerbell, as Ambassador of Green in 2009 and Angry Bird Red, as Honorary Ambassador for International Day of Happiness in 2016. The relevance of this one, however lies in the fact that gender equality is a complex issue and choosing a pop-culture icon, clearly tied to an economic super-power (Just look at her costume. What country comes to mind? certainly not Puerto Rico!) and with overly sexual image only makes things more difficult.

Several female staff of the UN staged a silent but very visible protest during the ceremony, attended by actresses Gal Gadot (star of the current Wonder Woman movie) and Lynda Carter (who played Wonder Woman in the 1970’s TV series). They stood up, turned their backs, raised their fists and then left halfway through the event. One of the protesters declared, “For something that is this important, you need a woman or a man who can speak, somebody who can travel, somebody who can champion these rights, somebody who is able to have an opinion, somebody that can be interviewed, somebody that can stand up in front of 192 member states and say this is what we would like you to do.”

Granted that honorary ambassadors simply had to be fictional characters (supposedly to be able to reach out to wider audiences such as children and adolescents), has this last appointment been a wise choice?

Without meaning to discredit Wonder Woman and the idea behind her, this post will briefly discuss why the said fictional comic book heroine is not really representative of every woman’s quest for equality.

Reasons to question Wonder Woman’s appointment as Ambassador for Gender Equality

1. Few women could look at Wonder Woman and be convinced that they have the power in them to change their situations for the better.

As an ambassador, she is tasked to raise awareness about the Goal 5 of the UN Sustainable Development Goals. This particular Goal aims to: “Achieve gender equality and empower all women and girls”. Now, looking at Wonder Woman:

Ver imagen originalImage courtesy of: Wikipedia

Can you honestly say that you can relate with her and that she represents what is empowering to you? If she does, then congratulations! If she does not, then you are part of a larger group of females who feel the same way. Author included. In fact, there are plenty of women who wouldn’t be able to look at the above picture without feeling uncomfortable. So how would Wonder Woman be a voice to those who can’t even tolerate the sight of her?

Considering only her appearance, already an important part of the world’s female population seems to be excluded of her representation: women whose culture and religion do not allow them to dress similarly, girls who feel insecure about their bodies and those who live in societies where slut-shaming is awfully prevalent.

When it comes to the more thoughtful angle, a few arguments come to mind: she’s not a mother, she’s no head of household, she’s not a student, she does not live below the poverty threshold and she certainly does not seem to earn a living from rural livelihood. These are contexts where the majority women can be found immersed in constant battle.

She is bisexual, though. So that’s a point for UN’s decision, against the ten others that are in contra.

Does this not make one wonder: who does she actually represent? The 20-40 something yuppies living in big cities from first-world countries? Not that they don’t have real problems or that their struggles are less important, but they comprise only a small fraction of the entire female population.

2. Appointing Wonder Woman as an Ambassador for Gender Equality diminishes the integrity of the said cause.

Compared to other Honorary Ambassadors, Wonder Woman is officially representing a very sensitive and highly controversial topic: women’s centuries-old demand for equality. With this move, it is safe to say that the UN is currently putting their credibility at risk especially towards feminist groups and any number of young girls who will not be able to identify themselves with this new role model*.

According to the UN’s official announcement, “Wonder Woman’s strength and fight for justice and peace will help to focus the campaign’s attention in… Sharing examples of real life women and girls who are making a difference every day.

Wonder Woman uses super powers to fight crime and bring justice to victims. Although this fact is- hopefully- being used to symbolize women’s empowerment, it actually is an insult (and a big one, at that!) to very real women who struggle every single day to keep their heads and spirits up while making sure to feed their families, keep them safe and to push their children to do good in life.

This is short of a spit on the face to every woman who is consistently being denied of tools (financial and professional, to say the least) to sustain themselves in this very biased world.

The bestowing of this title to the chosen symbol is an utter disrespect for girls and women who expose themselves to everyday risks of being sexually abused with nothing but their screams and their teeth and nails to defend themselves.

The UN must be aware of women’s situations around the planet. Don’t they create thousands of reports about the subject? So why such insensitivity?

Please excuse this humble servant for asking but, was the UN paid by DC Comics to promote a movie that didn’t seem to stand a chance to be a hit at the box office? because the organization have done some pretty amusing things in the past (such as setting a deadline to achieve the Millenium Development Goals). However, as entertaining as this appointment might be for some, FUNNY IT IS NOT.

3. It is not very clear how Wonder Woman would fight discrimination, or what type of discrimination she is going to help eradicate.

Under-Secretary General for Communications and Public Information Cristina Gallach mentions that, “While we have achieved progress towards gender equality in many parts of the world, women and girls continue to suffer discrimination and violence. Gender equality is a fundamental human right and a foundation for a peaceful, prosperous and sustainable world”

Oh, Miss Gallach! Did you not know that the said discrimination stems from deep-seated cultural and social factors in each context? Surely you do! Therefore, you should also know that turning a half-naked woman into a representative to raise awareness towards discrimination of all women is ironic. Because then, men and even our fellow women would say that once again, sex is being used to sell. It doesn’t matter whether an idea or a merchandise is being sold; it’s the means to sell that counts. The irony lies in the fact that women combat the way society objectifies females through sex, and then here comes the UN with this brilliant idea…

Accordingly, Wonder Woman does not seem very real and if she has been designated to set an example, then this just feeds the negative thoughts most women already have that we shall “never be enough”.

Thank you very much, United Nations’ Organization!

Other alternatives

Apparently, Honorary Ambassadors have to be fictional characters. So without much further ado, here are a few suggestions** as to who could very well represent the United Nations’ Goal Number 5 (written in no particular order):

  1. O-Lan, the protagonist’s first wife in “The Good Earth”
  2. Scout Finch from the novel, “To Kill a Mockingbird”
  3. Julie the protagonist of, “Julie and the Wolves” or Karana the protagonist of “Island of the Blue Dolphins”
  4. Ayla the protagonist of “The Clan of the Cave Bear”
  5. Alba from “The House of Spirits”
  6. Úrsula Iguarán from “100 Years of Solitude”
  7. Salome from the almost-forgotten chapter of “Noli Me Tangere” (Elias at Salome)
  8. Gayle and Cookie, protagonists of “Like Sisters on The Homefront”
  9. All of the members of “The Joy Luck Club”
  10. Kit from “The Witch of Blackbird Pond”

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Image courtesy of: Wikipedia

The aforementioned names are also fictional characters, but from novels. They are all strong, smart and spirited women, each of them uniquely gifted and were able to stand up to what they believed was right for them. And is this not the idea behind gender equality? being free to grow, develop and reach our dreams without anyone saying (whether implicitly or explicitly), “You’re just a girl, you can’t do it”; or worse “You’re a girl, you do it!”.

(Besides, thinking about it: wouldn’t it be better to get a fictional heroine from a text which would encourage young girls to read?)

Should there be any specific rules that the ambassador for Goal 5 be a comic book character, here are a few suggestions:

  1. Turn the above mentioned materials into graphic novels.
  2. Ororo Munroe (Storm) from the X-Men

Finally, Missandei from “The Game of Thrones” comes to mind in case a TV-series character is to be handed this title in the future.

Conclusions

On the 21st of October, 2016 the UN Organization appointed Wonder Woman as its new Honorary Ambassador for Gender Equality. At the same time, it also launched a Wonder Woman campaign with the slogan: THINK OF ALL THE WONDERS WE CAN DO.

According to the website, “The campaign is about women and girls everywhere, who are wonder women in their own right, and the men and boys who support their struggle for gender equality, bringing about positive change in their homes, workplace, communities, countries and the world together.”

The problems are: i) Wonder Woman is not representative of women and girls everywhere, ii) more than half of the world’s female population is too engaged in their survival as well as their families’ that they ignore what qualifies as wondrous women; while others may simply be too busy making their way through this male-dominated society, and finally iii) the men and boys will find it hard to genuinely support this cause because its representative’s image distracts them to form other kinds of thoughts.

The fight for gender equality is one that is already long-established. Indeed, one can choose any woman’s biography from any part of the world, from any point in time and there will be a common denominator among all: the fact that each and every one of them had to face male chauvinism every day, and they were left to fight it with whatever weapon they might have in hand (beauty, non-beauty, wit, humor, piety, silence, perseverance, submission, etc…).

Wonder Woman may be inspiring to some. Without any doubt, she may even have paved way to a number of girls and women to take that first step towards changing their unwanted situation. However, she can never represent women and girls everywhere.

There are many other fictional characters who could perfectly fit the honorary title- female protagonists (and antagonists too, why not?) to whom girls and women could relate. Thus, in the light of the novelty and excitement, let us allow our fellowmen and women to have fun naming Wonder Woman as ambassador to inspire the fight for gender equality. However, let us never lose sight of the bigger picture: the desire for a more egalitarian society where all people- men, women and LGBTQ- are treated equally in their homes, workplace, communities, countries and the world together.

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Image courtesy of: https://alifenotgrey.com

*How many girls and women in the whole world actually know of Wonder Woman? It might seem ridiculous, but technological gap is real and could be yawning wide open in many under-developed countries making it difficult to spread this campaign.

**Sadly, I have not read any Arabic literature to be able to cite an example from the said context.

-The  End-

Sources:

  1. “Is Wonder Woman qualified to be a UN Ambassador?”, BBC US & Canada, available at: http://www.bbc.com/news/world-us-canada-37734623
  2. “Wonder Woman announced as UN ambassador amid staff protest”, The Guardian, available at: https://www.theguardian.com/books/2016/oct/21/wonder-woman-un-ambassador-staff-protest
  3. “Wonder Woman appointed UN honorary Ambassador for the Empowerment of Women and Girls”, UN News Center, available at: http://www.un.org/apps/news/story.asp?NewsID=55367#.WA5e4SSGnfY
  4. “Goal 5: Achieve gender equality and empower all women and girls”, United Nations Sustainable Development Goals, available at: http://www.un.org/sustainabledevelopment/gender-equality/
  5. “Stand Up for the Empowerment of Women and Girls Everywhere”, Wonder Woman Campaign webpage, availabe at: http://www.un.org/sustainabledevelopment/wonderwoman/