BY CARLOS RHEAL CERVANTES
I recently wrote an essay in Filipino and sent the draft to my son, Carl Lorenz Cervantes. Carl is a researcher, psychologist, and university lecturer who has given talks on Filipino psychology for various organizations and conferences. His work has been published in academic journals, and he continues to share his research on Instagram, @sikodiwa. I believed the essay would pique his interest, as he has given talks on Filipino psychology for various organizations and conferences. This led to an initial collaboration exploring the traits of a Filipino financial mentor, which I imagined would be a good bonding experience.
The concept of the time value of money—that a dollar today is worth more than a dollar tomorrow—is a cornerstone of financial theory. This principle underscores the power of compounding, where even small investments can grow exponentially over time. However, true investment success transcends mere mathematical calculations and demands a holistic approach that encompasses personal formation, ethical conduct, and a commitment to good governance.
As our time horizon shortens, maximizing the value of our present resources becomes paramount. This is not merely about accumulating wealth but ensuring that our financial resources translate into meaningful experiences and a fulfilling life. Recognizing this, I believe that seeking guidance from experienced mentors is crucial on the path to financial freedom.
My corporate experience highlighted the importance of seeking wisdom from experienced professionals—through formal education, mentorship, or organizations like Finex—to navigate the financial landscape. Mentorship provides invaluable insights that go beyond textbook knowledge, offering a unique perspective drawn from mentors' personal experiences, triumphs, and setbacks. Through mentorship, we gain access to a wealth of practical wisdom, including:
- Developing a personalized investment strategy: Mentors help assess our risk tolerance, define our financial goals, and develop a tailored investment strategy that aligns with our individual circumstances and aspirations.
- Identifying and mitigating risks: A mentor can guide us in identifying potential pitfalls, developing risk mitigation strategies, and making informed decisions in volatile market conditions.
- Cultivating a long-term perspective: They can help you maintain a long-term perspective, stay disciplined, and avoid impulsive decisions driven by short-term market fluctuations.
- Building a strong financial foundation: Mentors can provide guidance on various aspects of financial planning, including budgeting, debt management, and estate planning, ensuring a solid foundation for long-term financial security.
- Fostering ethical and responsible investment practices: Mentors can instill the importance of ethical and responsible investing, emphasizing sustainability, social impact, and environmental considerations.
In the investment world, a strong reputation built on ethical conduct and long-term relationships is paramount. A strong reputation, like compound interest, multiplies opportunities. A trusted individual with a proven track record of integrity will attract greater investment opportunities, fostering a virtuous cycle of growth and success.
Furthermore, good governance is essential in both personal finances and business ventures. This includes transparent decision-making, prudent risk management, and strict adherence to agreed investment parameters. By prioritizing these principles, investors can not only maximize their returns but also contribute positively to society.
So, how do we find a good Filipino financial mentor?
My son, Carl, says a good mentor embodies important cultural values related to our Filipino attitude of kapwa (shared identity). They are good listeners (pakikiramdam), know when to get involved (pakikisangkot), encourage accountability (pananagutan), and know when to catch their mentee in case the mentee falls (saluhan). When we treat each other as kapwa, we create a sense of trust. Carl emphasizes the importance of these values in his work as a researcher and psychologist. To be a good social scientist, he must create a good relationship with people from a community to gather richer and more meaningful information. To be a good psychologist, he must be open to a relationship of mutual trust, accountability, and involvement. Carl is certain that this is not so different from finding a good financial mentor; if we know that a person has integrity, then we can also trust that they have our best interest at heart.
As we navigate the complexities of modern finance, it's crucial to remember that our time is finite. Continually delaying gratification may not be the wisest approach. Instead, we must strive to create a balance between present enjoyment and future security. This requires a proactive approach to financial planning, one that considers our individual circumstances, risk tolerance, and long-term goals. By embracing the principles of the time value of money, cultivating strong relationships, seeking guidance from experienced financial mentors, and adhering to sound governance practices, we can ensure that our investments grow our wealth and enrich our lives.