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How to determine your financial report card so you motivate yourself by measuring
your way to financial freedom
l How to amass wealth with Larrys 5/7 program
The myths Pinoys have about making money and how to debunk them with the right
beliefs
How to TLD (Think It, Learn It, Do It) your way to massive passive income (the key to
financial freedom)
Combined with Think Rich, Pinoy!, Grow Rich, Pinoy! will challenge you to say to yourself and
to the world, YAYAMAN AKO.
And to act.
grow rich barcode.pdf
11/13/06
www.shepherdsvoice.com.ph
ISBN 978-971-93671-1-6
1:13:47 PM
Grow
PINOY!
By Larry Gamboa, PhD
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Ga on che
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La e how Bo S
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In the wake of the stunning success of his first bestseller, Think Rich, Pinoy!, author and real
estate investor Larry Gamboa continues to impart his hard-earned wisdom on how to stay
comfortably and confidently wealthy for years to come.
Learning the secret of how to become rich is one thing but how to stay rich is
another matter.
GROW RICH,
PINOY!
GROW RICH,
PINOY!
ISBN - 978-971-93671-1-6
Contents
Preface
Foreword
SECTION I
What Keeps Pinoys from Thinking Rich
12
Chapter 1:
35
Chapter 2:
59
Chapter 3:
Chapter 4:
75
107
SECTION II
Some Pinoys Who Are Thinking Rich
126
Chapter 5:
128
Stewardship in Action
By Charlie Gamboa
Chapter 6:
141
By Ronald Cagape
Chapter 7:
153
Chapter 8:
165
By Giovanni Olivares
SECTION III
Guidelines for Growing Rich
177
Chapter 9:
Think It
179
Chapter 10:
Learn It
197
Chapter 11:
Do It
203
Chapter 12:
212
Chapter 13:
217
Preface
When I was four years old, I almost drowned.
And for the longest time, I never learned how to
swim.
I was horrified of the water. I never went in. I just
stayed in the perimeter, playing with the sand in the beach.
Consequently, I built the most sophisticated sand castles for
kids my age. (Every catastrophe has a bright side.)
But at the age of 12, it happened.
With my heart palpitating, I walked into a shallow
pool, lay face down and, wonder of wonders, I floated. It
was exhilarating. The water was carrying me. It was an
overwhelming feeling Ill never forget.
All of a sudden, I knew how water worked.
In the same way, there was also a time when I didnt
know how money worked.
Foreword
10
11
12
SECTION 1
13
Some readers jump right in. They see the goal and, straight
as an arrow, they go for it. Action agad.
But some get stuck. They read. They get inspired. But
they do not act. They are blocked. They have more questions.
And the questions stop them from acting.
This is the purpose of Grow Rich, Pinoy! to push you
beyond your questions and into action.
Before we start, lets see how you fare in your financial
report card.
Determining Your Financial Report Card
David McCleland of Harvard University calls it N-Ach.
John Burley describes it as the Seven Levels of Investors.
Robert Kiyosaki borrows from Burley and describes his
understanding of the levels of investors. Whatever way you
look at it, whether N-Ach or as levels of investors, all three
address the challenge of moving forward financially.
I borrow from McClelland, Burley and Kiyosaki and
present to you the Pinoy Scale of Investing. I will also
provide you with vignettes of each type of investor. The
goal is to help you visualize what level of Pinoy investor
you are and decide where you want to be.
Lets begin by visualizing.
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negative
positive
__1. After all the bills are paid, I have no money left to
invest.
__2. I spend more money than I earn each month.
__3. I borrow money to invest.
__4. I borrow money to pay the interest on older debts.
__5. My debts are greater than my assets.
__6. I shop with my credit card and spend more than I
can pay off in one month.
__7. I regularly pay only the minimum balance on my
credit card.
__8. I set aside money every month and put it in a
savings account in the bank.
__9. I save money to buy big-ticket items like jewelry, a
stereo or a piano.
__10. I dabble in stocks and buy whatever my broker
recommends.
__11. I take risks in the stock and financial markets
because I believe the returns always outweigh the
risks.
__12. I believe I can make a quick killing in the stock
market.
__13. I am actively involved in my investment decisions.
__14. I avoid bad debt.
15
16
Grade
50-60
61-70
71-74
75
Barely passing (pasang awa)
76-85
86-95
95-100
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faith and no action. And what does the Good Book say?
Faith without action is dead.
While she has some assets, in truth, her level of debt is
too high. For the most part, she does not control her cash
flow. She simply lets it flow, mostly out rather than in.
Life in Rich Dads terms is full of doodads (expenses
that do not bring in money). Doodads are accumulated
through Margies favorite past time shopping or
malling paid for by the ever-present credit card.
When the credit card bill comes, which figure does
Margie pay? She pays what the bill points her to (nicely
highlighted by the bank, of course) the minimum
balance. See how helpful banks can be?
As a result, Margie ends up carrying a huge interest
load (something like 36% per annum) on the unpaid
balance. Margie scores 61%-70% in her financial report
card.
The Level 2 Pinoy Investor (71%-74%)
These Pinoys are the savers.
Pia puts aside money regularly. Pia puts the money in
the bank and it earns interest through the money market or
through some special promo of the bank.
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23
It Cant be Done
Aida delights in proving to others that getting better
returns than bank rates isnt possible. She whines and
complains about missing out on an investment opportunity
as if some barrier other than her own mind is to blame.
There is also Virginia the Cynic who says, Ay,
magkaka-problema yan. Di ka babayaran ng tenants
(Youre going to have a problem there. The tenants
wont pay you). How can you make money out of that?
Siguradong matatalo ka! (Youll surely lose!) If the
returns on bank foreclosed properties are so good, why
didnt the banks do that themselves?
Once in a while they are right in their dire prediction of
disaster. This gives credence to their belief and so they say,
You see, I told you it would be bad. So you should never
venture out. Its too risky. Even when the opportunity is
already there staring you in the eye, they kill your dreams.
Virginia and Aida are the Dreamslayers. Listening to
them, you will become as poor as they are. Youll wallow
in the same misery and scarcity theyre in.
In truth, Virginia and Aida are cowards. Often
vocal, they are quick to try to bring others down to their
level. Because they are afraid and unwilling to gain the
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Helen follows her own judgment and not the brokers. More
often than not, Helens calls are better than theirs.
Helen has written a long-term plan that will enable
her to reach her financial objectives. The plan contains the
following elements: she pays herself first and she re-invests
her investment returns.
Helen receives Level 4 investment returns of 15% a
year or more; she is disciplined in executing her plan. She is
financially literate and responsible; and she avoids bad debt
and is not averse to taking advantage of good debt.
Helens investment plan is steady and reliable, like a Swiss
watch. In fact, its boring because its simple, repetitive and
steady. Her sound investment plans avoid the fireworks and
the dramatics which are good for the movies but not so good
for the income statement or the balance sheet.
Among investors like Helen are the Pinoys who, month
after month, collect royalties (from their songs, for example),
dividend payments (from stocks) or rental income from
properties.
These are the Pinoy investors who have gone past the pull
of gravity (i.e. poverty). While theyre not yet in the fast track,
theyve already broken through the poverty barrier and are on
the way to financial freedom.
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32
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34
35
CHAPTER 1
36
37
P T L F A (thats the 5)
38
39
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42
43
44
45
46
47
Steven
Jobs
Larry
Gamboa
Tony Tan
Caktiong
PLAN
Manufacturing
Apple
Computer
Business
Bank
Foreclosed
Property
Food Retail
Franchising
TEAM
His Family
Woziack
Family, Trace
Trajano & Bo
Sanchez
Family
LOCATE
Cebu to
Manila
Silicon
Valley
Metro Manila
Nationwide
FINANCE
Saved
P50,000.00
IPO
Apple
10% down
Franchise
Fee
ACT
Built 8
More Core
Businesses
Pixar,
Next,
iPod
ESTI
(Larrys
Seven Steps
to Success)
Franchise
Jollibee,
Chow
King, etc.
You
(Fill
in the
blanks)
48
49
50
working for you. You now have the freedom to do what you
wish.
Is it quick cash? You buy low and sell high, a practice
also known as flipping. Some folks never put out cash. They
simply take out an option on a piece of property, advertise
and sell before the option period is up. They simply pocket
the difference between the buying price and the selling price
and move on to the next deal.
For example, Dinna
The cost of
Revilla found a foreclosed
education is always property that had a cell site
cheaper than the price which generated rental income.
of ignorance. Or to put She bid for the property and
it bluntly, If you think won. Then she sold the rights
education is expensive, to an interested buyer and she
try ignorance.
earned P300,000 from the
deal. The title to the property
never passed through her name but went straight to the
buyer. Dinna simply flipped the property.
Develop Your Expertise Gradually
Dont expect to be an expert before you begin. Do the
figures for potential target properties until you find a property
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