Hard work and a good track record of commercial success are not enough guarantees for financial success. Let me relate the story of Mrs. AC. For almost 20 years (1974-1993), Mrs. AC engaged in wholesale distribution of food and commodities(rice, sugar, vinegar, etc.) to several barangays. Her daily sales were running at 40,000.00 pesos. At the end of each month, after deducting ALL her expenses for costs of food supply and ALL OTHERS (including her household, personal and other payments for personal assets), she would still be left with around 3,000.00 pesos. Mrs. AC never paid herself any salary. She would just draw money from the business cash flow for any need that she had, no matter whether it be for the business or for herself or her family. In the meantime, the business was doing well so Mrs. AC was able to acquire a jeep and four tricycles. In 1993, Mrs. AC borrowed 240,000.00 pesos in order to finance her farmer suppliers so that she could be assured of cheaper supply. To get this loan, she had to mortgage her home, which the bank appraised at 500,000.00 pesos. This plan did not work. The farmers could not pay her back.
Posted on: Thu, 05 Sep 2013 06:18:09 +0000
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