Lucio Tan, parenting and personal finance

When “El Kapitan” was buying the government’s stake in Philippine National Bank more than 10 years ago, my teammates and I (in another publication) wrote a special report on him. While doing my research, I must have read truckloads of literature about the man -– from urban legends to PR-ish articles. Sadly, most of those publications are not available by Googling.

He has been painted as the best rags to riches story this side of the planet, to the most “well-connected” tycoon and everything in between. Lucio Tan is an enigmatic figure. The fact that he is one of Asia’s richest billionaire is not as interesting as how he got his billions.

I would have loved to a one-on-one interview 10 years ago, if only to ask him how he could remain unscathed after every Philippine president he has been closely linked to went down in political flames. But of course, we all know the answer to that.

Besides, I didn’t speak Chinese.

In today’s paper, there’s an article on El Kapitan as a father. The stories from daughter Vivienne Tan are revealing:

“It was a freezing day in Tokyo. I was a skinny seven-year-old wearing my favorite pullover with an apple on it…We were outdoors and my sister and I were freezing, our teeth chattering, once in a while playing smoke rings and warming our hands in our pockets. My dad slowly approached us, sat down, smiled and softly said, “Just think it is not cold.”

My younger sister and I just looked at each other with a puzzled look unable to comprehend how he could even say such a thing, when it was downright cold. I thought that maybe the cold had started to get to his brain.

Perhaps sensing our skepticism, my dad persisted and said, “Relax, close your eyes and imagine. Think of the color green, imagine grass, think of the color yellow, imagine the sun, think of sunflower … imagine the colorful butterflies … imagine hearing the birds chirping … imagine the weather … it is summer, it is hot …”

Then, as if under a magic spell, I felt my body slowly stop shivering, my teeth stopped jittering. When I opened my eyes, I was actually still with my father, who was now smiling. Then he said: “See? It is all in the mind. Just believe.”

Learn from the Lucio Tan art of war: It is all in the mind. When you are broke or trying to get out of a mountain of debt, learn how to discipline your mind into thinking sunny days will soon come. It can help you hang in there.

“Ten years later, my first year in the US to me was a turning point…On my second term, my friends started getting to me. Like some schoolmates, I started to cut classes, go to parties, shop, hang out. I knew I was not doing the right thing but why can’t my friends and schoolmates see anything wrong? How can they use their tuition funds, given to them by their parents, to buy cars and other things? I felt so lost. I felt so confused.

One time, I came home from spring break… my dad was there. He was carrying a piece of paper. I was shocked to see that it was actually my grade report! Up to this day, I never asked how it got to him. Full of shame—I remember I didn’t want to look up.

Instead of getting scolded, he used his gentle voice and asked: “How can your grades of As and Bs deteriorate to Cs and even Ds?” I was burning with guilt. I wished he just scolded or yelled at me. But no. He didn’t. He continued by saying: “I can buy you everything you want but I cannot buy you knowledge. The best I can do is to give you everything you need to acquire that knowledge. And that, I have given you. The rest is up to you.”

The young man who started his billions with a scrap business has got to value education. This was foremost in my mind this morning when my I noticed my 13-year old daughter’s pea-sized enthusiasm for studying. Whether or not I like Lucio Tan, that little line “the rest is up to you” turned her inattention to self-awareness. Knowledge and education has got to be one of the biggest foundations of life, not just personal finance and financial literacy.

“Four years later, in 1991, I was fortunate enough to graduate from the University of San Francisco with a double degree in Math & Computer Science. Being a computer science graduate from the US in the ’90s, I could have actually commanded a handsome salary. True enough I had good job offers with great salaries from the best multinational companies.

My dad who had just flown in at that time asked me which offer I had decided to take. I boastfully replied that as a computer science grad I was entitled to wait for the highest bid, which would surely come along. He paused and then wisely said, “Be humble. Don’t look at the money, but rather, look at what you really want to do and the amount of learning and growth you would get.” He further added, “In fact, you should pay tuition to the company for giving you the training you need.”

Here, I’m a bit ambivalent. What if Vivienne wanted to be a scrap businesswoman? Would he support it because it’s her passion? What do you tell your children when its time to choose careers? Do you ask them to consider careers that are in demand and have the best pay? Or do you honest-to-goodness tell them to follow the desires of their hearts?

My daughter’s career choices are wild, to say the least. Once, she said she dreamed of being a rock star. Yeah. Can you imagine a SHY rock star? Then she wanted to be a singing marine biologist. She changes her mind the way Frank the typhoon did. It’s well and good to follow your passion, but while young, include in choices a, b, c and d the careers that would at least pay the bills!

Life according to Lucio Tan. Twisted, but interesting.

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I wrote a full-length article on “Sneaky tips that take pain out of budgeting” for the Philippine Daily Inquirer and you can read it here. Yes, guys, I have been asked to send my personal finance articles over to the print version on a weekly basis. It’s the age of convergence, finally.

Here’s an excerpt:

“If your heart does flip-flops over numbers, budgeting the traditional way will be easy: jot down every expense the moment you make it, figure out how much you really spend and where your money goes on a monthly basis, set a limit for each item and stay glued to your ideal budget.

But the numbers game is not an easy one for most and not even rising oil and food prices can turn busy parents into budget freaks. Romelia Neri, an economist and a mother of three children, could hurdle sophisticated calculations but she finds it very hard to budget the conventional way.

“They say budgeting is the foundation of good money management but I find it too time-consuming. I would rather read to my child,” Neri says.

On the contrary, Neri’s sister who is also a mother has mastered the art of budgeting. “She records all her daily expenses at the end of the day in her Starbucks calendar book,” Neri says.

Higher prices of gas, food and almost everything else are hitting Filipino homes hard this year. Budgeting could stretch incomes by helping Filipinos to avoid spending on things they don’t really need, like DVDs, restaurant meals and toys.

The problem is that only very few take the time to make a budget, and fewer still stick to it. Budgeting sounds and feels painful; overdoing it can cause spending binges, says Pascual M. Garcia III, president of Philippine Savings Bank.”

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Roundup

In the blogosphere, Benson Te asks whether global financial markets survive high oil prices and says that pinning your hopes on the recovery of oil seems specious. Speaking of stock markets, I will be at an Absolute Trader event tomorrow at the Philippine Stock Exchange where market participants will bang the table on whether the PSEi has reached bottom or not. Abangan.

Parttimeinvestor says stocks are still the best bet against inflation, especially shares of companies that use oil efficiently. You’ll remember that in a previous post, experts have recommended shares in food companies, banks, energy, mining, utility and infrastructure stocks like telcos and water companies.

DextersLab says SeaOil’s fuel prepaid card is a good example of the application of a hedge fund in business. Interesting! Jeff Gonzales has an analysis here of why it pays to have a long-term investment horizon.

All in all, keep your minds sharp and believing, appreciate knowledge and education, include only smart options in the roster, budget well but don’t whip yourself in the process. Thanks for visiting MoneySmarts today. Until next time.

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