My money story: Chinese-Ilocano and proud of it
By Melvin Jao Esteban, as told to Lynda C. Corpuz, MoneySense magazine | 03/08/2009 6:24 PM
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My being Chinese-Ilocano is a lethal combination – the Chinese are known for their business sense while the Ilocanos for their frugality.
And my parents really complement each other. My father, Manuel, is not really poor or really rich but he experienced hard labor by fetching kanin-baboy and washing frying pan. He is on the money making side, and most of what I know now, I learned from my dad. My mother, Judy, is from an affluent family in Manila and she is on the savings side. They migrated to La Union where we grew up. They taught us to have businesses of our own and to be frugal as well.
Starting young
Save, spend, and invest, the Chinese-Ilocano way
If you have to spend, spend. What you can save, save. That is what my mom tells us. She says, “One of the best things for you to be able to handle money well is to know how hard it is for you to make it.” And we know this by heart.
What you do not see, you do not spend. My credit card is attached to my checking account where my salary comes in. Once in, it automatically pays my credit card.
Go auto-mode. The reason why some find it hard to save is because of the pain involved in departing from their money. Say, you are told to save P200,000 annually. Now, you have P200,000 in cash and it is so difficult for you to save it but if you save P200 to P300 daily, it is easier. Start when you are young. If you are young, you have greater potential to make a lot of money, but only if you know how to invest properly. Basic rule: go long-term. You will not be tempted to spend it.
Know where to make money. Make sure to look for opportunities with relatively higher returns than others. Like in the stock market – how would you know if an investor or a fund manager is good? It is when the stock market goes down the last man standing is the best investment manager. And surprisingly, you can make money in the stock market whether it’s going up or down, only if you know how to invest properly.
Spot good and talented people. Managing your business hands-on is good. But if you want it to grow big, you should hire good people to expand the business for you. This is the concept we are applying in Congo Grill.
Follow your gut. This is the beauty of the Chinese way of doing business. A lot of Chinese, malalakas ang loob, kaya nga pag sumabak sila sa negosyo, hindi nga minsan calculated, bahala na kahit high-risk. Of course, that is not always good for you are exposing yourself to too much risk.
Get good exposure. I am also thankful I have very good corporate exposure. Instinct combined with corporate discipline – that is powerful and gives me a very good foundation in looking at things with a better perspective.
I never had any allowance when I was in grade school. I only got an allowance when I was in high school. And it was almost the amount of jeepney fare I needed to go to school. They never deprived me though: they gave me food as baon. But they never gave me money.
My mom, meanwhile, helped me open an account when I was only seven. By the time I was in Grade 3, I was introduced to time deposits and I was so proud to have about P10,000 in the bank, which earned an interest of about 22%.
And unlike other parents, ours did not push us to stay with the family business, the Midtown Food Palace in La Union. That is why our eldest, Michael, is a physician; my twin, Malvin, is also a physician; and the youngest, Jerome, is a businessman.
I, meanwhile, finished BS Mathematics from the University of the Philippines. But I went to work for our restaurant for a while. I managed it, fixed the systems, etc. Then I moved out and went corporate.
Operating like a Chinese businessman
I operated like a Chinese businessman in my previous companu, telling people, “Let us be aggressive. Let us look at the markets where we can penetrate.” Like the Chinese market has a very big potential and we expected it to grow faster by 100% to 200% – this is the business plan I did for them. When I first joined the company, its Chinese business was around P40 million. As of the end of last year, we were generating close to P400 million. In 2005, roughly, we generated around P300 million. (Editor’s note: Esteban is now Generali Pilipinas senior vice president for non-life and bancassurance, and a registered financial consultant.)
Establishing a business
My parents kept on insisting though that I have to have my own business. So I went also into the restaurant business, but this time, I am not managing it directly. This is also to prove to my parents that I do not really need to be hands-on for it to grow. Imagine if Jollibee remained a family business, will they have so many branches now? Jollibee founder Tony Tan Caktiong hired the best people to expand the business for him. This is the same concept we are applying in Congo Grill, which I and nine partners put up in 1999.
We did not have a business plan. We did not even know where we were going to put up our restaurant – wala kaming kaalam-alam. Though my family is from the restaurant business, my partners were not really aware how this business operated in the Philippines. If you did a feasibility study on it, hindi mo nga gagawin `yung restaurant na `yun. After all the struggles, the 10 of us still decide as a group especially on expansion plans, while our managing partner handles the day-to-day operations.
Investing as passion
I also believe lahat ng puwede mong pasukan ng pera mo, lahat may risk – it is just a matter if it is a big or small risk. My first year in the stock market in 1994, I lost almost P300,000 because I invested in speculative investments. I had a working concept of how to play it but I did not know actually how to play it. It looked simple but it is really complicated to make a lot of money.
But my portfolio now is very clear. I have short-, medium-, and long-term investments. I already set aside money for my retirement or anything for my future. It is not as significant as what a business can give me, but projection-wise, in dollars, it will give me a long-term rate of around 9%. Also, I have long-term investment in stocks.
Short- and medium-term investments, meanwhile, are allotted for opportunities. A portion from my short-term investments is now in stocks – this is actually where I expect the growth would come from. If I am earning 30% to 40% on my stock investments, I do not really need to create a business. And the probability of my earning that much in a year is already very good. And I would project, after the stock market, the next thing to go to is real estate, considering the trend three to four years from now.
Not only do I invest money-wise, I also advance my education to increase my competency in financial management. I already completed courses on financial planning and insurance, investment planning, tax planning, retirement planning, and employee benefits from the College of Financial Planning in Colorado, US. Currently, I am pursuing my post-graduate studies (distance education) in the same school, undergoing my Certified Financial Planner Level 5 on estate planning.
All what I am doing now, I learned from my upbringing, and I am thankful that I am a Chinese-Ilocano.
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This article is from is MoneySense, the country’s first and only personal finance magazine. You can read more financial tips and stories at www.moneysense.com.ph.
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