Real freedom
On June 12 we celebrated our 119th Independence Day. While we enjoy the so-called freedom which our heroes fought for with their lives, how far have we reached since the victorious emergence of Philippines as a Republic? Let me leave that question to the more knowledgeable political analysts. Instead, allow me to focus on three key measures of personal freedom and ask the ultimate question: Are we really free?
Freedom from Debt. A lot of people measure success and value by the things they possess. Possession though is different from ownership. Are these things really considered assets or liabilities from our end? Are these possessions acquired through savings or are we slamming down in debt? If our answer to this question is “I brought this through my savings” that’s good to hear. Still, it begs the question – is this possession a functional use of your savings? If this property is a piece of land, a house and lot, perhaps we can say that you have added value to your financial statement as these can really be considered as assets. But if your purchase includes car, gadgets, fashion items – anything whose value depreciate over time, it may mean that you have invested your money into something that will eventually turn into a loss. Is the consumption value worth the price paid for it over its useful life?
Some will proclaim “I have all of these but I had these through credit” If you bought something that will eventually lose value and you had it through credit, most likely you will end up paying debt way beyond the return of investment. Debt for development bankers like this writer is viewed positively as we encourage entrepreneurs who take financial risk in the hope of harvesting an ROI. Debt for a business is necessary to expand it – debt in a business provides the additional capital beyond the owner’s equity necessary to step up the enterprise.
Personal debt though must be judiciously studied as not understanding what you’re getting yourself into can be costly, and will make you miss out on what you really want to do with your money. Individual debts resulting from capricious and lavish lifestyle which one cannot sustain nor maintain from regular income will not count as financial freedom. Simply put, it is like a spiral of quicksand you put yourself into and an endless struggle of making ends meet. Limit personal debt to the essentials.
Live within your means. Simplify your lifestyle. Do not be tempted to accumulate things you don’t need by acquiring it through credit terms. The fundamental personal finance rule is that for every income, there must be a fixed percentage that goes to savings. If you can manage a life that is debt-free, you can truly say you are free. Freedom from hatred resulting to violence. The common biblical advice “Love your enemies” is a profound concept, simple yet difficult to execute. All chaos in this world results from hatred – of other’s culture, of other’s race, of other’s belief. While we need not accept the differences in ideologies in this world, if we will live by and stand by this one divine principle then peace will not just be a pipe dream. In our beloved Philippines, the differences in attitudes towards each other do not only divide our countrymen but also result to counter measures that instead of uniting, increase the gaps among us. If we can make an effort to put ourselves in the shoes of the “other”, maybe we can find the space that will engender a better world to live in. If only we will all learn to listen and understand every rightful argument, maybe we can reduce the chaos.In the end, love begets love. We will only be free if we liberate ourselves from insecurities, rift, jealousy and above all hatred.
The proper use of your freedom to choose. We can say that we are enjoying freedom today in a relative degree. If Peter Parker, Spiderman’s alter ego, can say that “With great power comes great responsibility” so does “freedom comes with even greater responsibilities”. Our freedom means abiding by the laws set forth by the government and participating in good governnce for our community. Our freedom means being responsible citizens, paying correct taxes and following reasonable ordinances, like simple traffic rules. Our freedom means being proud of our roots, of the culture that made us Filipinos unique in the world. Freedom means not seeing our race as somewhat greater or weaker than other nations. Freedom means we give our best for the betterment of our people,our country and our nation. Freedom means being able to face the world holding our head up high being proud that we have been the best person we can be, as good citizens.
May the country’s independence be a catalyst of reflection as to what and where we should be really free in order to become agents of change in our country and into the world.
(Benel D. Lagua is Executive Vice President at the Development Bank of the Philippines. He is an active FINEX member and a long time advocate of risk-based lending for SMEs. The views expressed herein are his own and does not necessarily reflect the opinion of his office as well as FINEX.)