Jump to content
Sign in to follow this  
Paddy

Assessing your financial risk...

Recommended Posts

Paddy

I am at least a 35 to her - Should I take her seriously that she wants to dump me for a rich Americano? 

 

I have learned in a very short space of time, that these topics can go off in unanticipated directions.

 

Yes - this risk assessment method can most definitely be used in the reverse sense.   :good:

Share this post


Link to post
Share on other sites

Headshot

I have learned in a very short space of time, that these topics can go off in unanticipated directions.

 

Yes - this risk assessment method can most definitely be used in the reverse sense.   :good:

 

The "law of unintended consequences" is alive and well on LinC Forums.   :search1:

Share this post


Link to post
Share on other sites
AmericanInCebu

 

and no, this one doesn't belong in the investing forum (although I'm not sure if here is the right place either).
 
I was prompted by a recent occurrence in my partner’s family to take a pulse check on the level of financial risk I face in my dealings with her family. I then reminded myself about all the advice out there in multiple topics on this and other forums. As a result, I decided to put together a simple risk level calculator for anyone in, or contemplating, a relationship with a Filipina who resides in the Philippines. The plan was to bring it all into one simple spreadsheet.
 
There are probably many forum members who would say “I don’t need a spreadsheet to determine my level of risk” and I don’t disagree. What I found useful about this exercise was having a way to keep all of my thoughts together in a consistent manner.
 
Being in, or contemplating, a relationship with a Filipina residing in the Philippines has some associated financial factors that are probably not common in relationships in all parts of the world. They may be common when the relationship works across a boundary of significant economic differences. The calculator is probably of little value if both you and your lady live outside of the Philippines or if you are not in, or contemplating, a serious relationship. The method, however, would work equally well in any situation involving 3 parties. 
 
I hope this calculator has value to others. It is not judgemental and only indicates the level of risk you might be facing. If you firstly agree with the simple factors and you are comfortable with the level of risk calculated for you, no problem. If you agree with the factors and are not comfortable with the level of risk calculated for you, you might wish to consider some mitigating strategies.
 
You may not agree with the factors I have used. You may question the validity of the simplicity of this particular approach. These are good topics for discussion.
 
The calculator considers three “people” (you, her and her family) and requires an assessment on a scale of 0-10 for three factors for each of the three “people”. (I am ex-army, 3 is a good number). On the scale, 0 is no risk and 10 is high risk. The scale gives a person adequate scope (my opinion) to have a reasonable assessment for their situation. The three factors for each person are not necessarily the same. They are what I consider to be most relevant to a risk assessment for that particular person. When you have completed your assessment of the nine factors, you can see your overall level of risk and which of the three “people” presents the greatest risk and why.
 
Factors for you
  • Proximity – the more time you spend together, the more chance you have of exercising some level of influence in financial matters 
  • Trust – how much do you trust her? You might think trust is a factor for her. My contention is that this is all about you. I consider myself to be fortunate. My partner has demonstrated her trustworthiness time after time.
  • Generosity – how likely are you to open your wallet? I have put myself firmly in the middle of this scale - not a complete sucker but....
Factors for her     
  • Family links – (generalization alert) most Filipinas have strong links to their family and are highly motivated to help their parents, siblings, children etc. They may also be encouraged or manipulated into helping. My partner has openly stated a desire to help her siblings, hence my high score for this factor.
  • Financial position before meeting you – does she have experience with handling financial matters? It is another generalization to say that if she had nothing before she met you, her financial dealings will be fraught with risk – but I am saying it anyway.
  • Assessed business acumen – if you are going to help her run (finance) a small business (sari-sari, piggery, tricycle, jeepney, etc.)  what sort of a businesswoman is she? Does she trust relative employees too much? Does she understand the market, cash flow, stock management etc?
Factors for her family
  • Size – the bigger the family, the more likely it is that there will be a relative of questionable integrity, ability etc. (that’s not just Filipino families!) or the bigger the family, the more financial needs will be presented to you. This is a very subjective measure. In my partner’s case, I think her family is large – one parent, many siblings, many aunts and uncles, lots of nieces and nephews
  • Current financial position – does the family have experience with handling financial matters? If you observe the family, what sort of place(s) do they live in, what do they do for a living and how do they manage their finances? You may not know about the hectares of coco-lumber, but if it stays hidden from you, that’s a pretty good indication of some risk based on family attitudes towards finances.
  • Assessed level of need – statistically, many Filipino families are below, at or near the poverty line. There could be many needs. In my case, all but one of my partner’s siblings have some level of need.
The calculator will work at the boundaries:
  • You live together, she was rich before you met her and she comes from a rich, well to do family – your personal level of financial risk is low. You may be subject to other risks or you are living the life of Riley. There would appear to be a few of these people on this forum.
  • You’ve never met her in person, don’t really know anything about her or her family and are a sucker for a sob story – your personal level of financial risk is high. You might get lucky but you are more likely to be a scam victim. There are many of these people on all sorts of forums (fora?).
Here’s what it says for me (I am not asking anyone else to post their own result):
 
 
As you can see, my greatest risk comes from the family and my partner’s desire to help them. This risk manifested itself in the recent occurrence I mentioned at the top.
 
I love my partner and I am willing to assist her family (within the capabilities of my resources). I do not appreciate it when a family member takes advantage of her good nature and my willingness to assist. Fortunately, neither does she. We will be employing better mitigation strategies going forward.
 
You may be quite comfortable in your relationship or you might have concerns. Give the calculator a shot and see if where you think you stand is the same as where I think you stand.
 
 
Just because you assess a level of risk doesn’t mean that something will happen. The problems come when you haven’t assessed your risks, haven’t set up any mitigating strategies AND the risks manifest themselves. You may not be able to mitigate every identified risk.

 

 

 

 

 

Great posting.  I scored 65 -- time to re-think!!!

Share this post


Link to post
Share on other sites
rainymike

I think it's a great idea to always keep on top of risks. Can't always eliminate them, but it can help you prepare for them.

 

Here are some thoughts for your calculator:

 

On the You side of the equation:

 

1. the greatest financial risk that hit me was when I decided to raise my own family at my age. Kids expenses here in the Philippines are lower than stateside, but if you are on a fixed income, the costs of schooling, healthcare, entertainment, etc. for the kids have added up quickly for me.

 

2. present and future risk: until the kids are adults, I feel responsible for their well-being. So my financial risks are those that I face today as well as the needs of the kids until adulthood. So today I have tuition x 4 kids. Over the next 15 years, that becomes tuition x 4 kids x 15 years. I have a strong need to try to make sure those 15 years are taken care of.

 

3. my age and health: although I've thought this one through, there are no guarantees. For older guys the risk of croaking or falling into bad health increases. That puts a little more pressure on me to insure that a nest egg is available for the family should I go or that my medical expenses don't break the bank. 

 

4. diversified nest egg: I'm just starting to do this now. Finances in the Philippines are dicey. Insurance companies, banks, etc. are a bit more risky than stateside. Need to spread the nest egg around ... banks, property, funds, etc.

 

But nice job. I agree that the important thing is thinking through and identifying the risks.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Adsbygoogle

    Advert



  • Adsbygoogle

    Advert

×

Important Information

By using this site, you agree to our Terms of Use, Privacy Policy, Guidelines and use of We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue..