All Articles With Category : Personal Finance

The latest and the best financial news, tips and tricks.

How to Recover from Terrible Debt

Being young and in debt is more common these days than it used to be. It may be due to the fact that it’s easier to get the things that you want on installment. The thing is, debt in the Philippines is vastly different than it is in the West. There’s debt, and there’s utang. The latter isn’t the kind of debt that involves paper, or even actual money. Most young people feel obligated to provide for their families when they’ve got stable jobs. Utang is basically money borrowed from family or friends, or favors (utang na loob) owed in the same aspect. At times, the need to pay back the people who help you can lead to you taking on debt that may seem beyond your ability. We talked to Jake Rosario – an IT Analyst and now, investor – on what it was like to have to recover from six-figure debt in his twenties. Where did the debt come from? JR: From all sides, really. It stemmed from wanting to ensure my siblings’ education as soon as possible. Given that it was their senior year, I figured it couldn’t hurt. I had a stable job, so I could pay it off slowly. Then the bills started piling up, and everything just went balls up – wait, can I say “balls up”? The debt came from using my credit card to pay their tuition, and then my brother had an accident that required surgery. What did you do when you learned it had reached six figures? JR: There’s this…

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8 Sure-Fire Ways to Protect Your Money

Cash is king for Filipinos – with 60% of their total fund holdings in cash. They prefer tangible assets such as houses and household appliances compared to intangible ones such as stocks and bonds. They’re scared of losing their own hard-earned money, and they want to protect their assets from risks. In line with this, the Bangko Sentral ng Pilipinas (BSP) enumerates eight sure-fire ways for Filipinos to protect their money: Having a savings account is one of the safest ways of protecting your money, and you can deposit and withdraw cash at any time. But this is only one way. Take more steps forward and learn how to invest. If you know what you’re investing and and aren’t just following hearsay, your money will grow. If you want to invest in mutual funds, UITFs, and stocks you can read the following articles (Mutual Funds and UITFs: Investing for Beginners, How to Create an Investing Strategy for the Stock Market). “100% guaranteed returns in 1 month!” – That’s the bait people fall for when a scam is right in front of them. Filipinos want to protect their hard-earned money, so they don’t want to put the cash in anything that is not guaranteed. Here are 8 sure-fire ways for you to protect and grow your cash…the right way: 1. Deposit in banks Only banks are allowed by law to accept deposits. Don’t entrust your money to any institution not authorized by the government. Your money is insured up to Php 500,000 per depositor per bank by the PDIC. 2. Know…

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5 Retirement Planning Mistakes that You Can Avoid

It’s never too late or too early to plan your retirement. Often, it starts out with just talking about it with friends.  Retirement plans as a topic of conversation can reveal planning mistakes you’ve already made without realizing it. According to a MoneyMax.ph survey from May, 61% of people have started planning for retirement – but are they taking all the right actions? Here’s a look at five retirement planning mistakes most people make, and how you can avoid them. Having Bad Debt “Bad” debt usually means unnecessary credit card expenses, or defaulting on loans. Racking up debt puts a strain on saving for your eventual retirement. For example, the loan you took out to buy your home can last you well into your retirement years, thereby eating into any funds you’ve designated as your nest egg. How to avoid it: If you do have any kind of debt, it’s ideal that they’re paid off well before you retire. Paying an extra Php 1,000 or Php 2,000 your monthly due on credit card bills or loans can shave years off the more long-term debt that you have. Overlooking Inflation Inflation is a reality, but often you might think a certain amount is enough for you to retire comfortably. That isn’t always the case. It’s a mistake when you peg your retirement savings at an amount that works at the current standard of living. While the inflation rate in the country as of July is at 0.8%, the market does tend to be unpredictable. In  40 years, the Php 50,000 in…

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Top 5 Business Bloggers: Advice for Budding Entrepreneurs

Taking that dive into your own business can be fairly daunting. There’s much that you need to consider and even more that you need to learn. But when you’ve already made the decision to start your own business, there’s very little that can stand in your way. Read more: 10 Amazing Business Moms If you’re looking for a little more inspiration, there are blogs you can visit to take in the experiences of those who have already made it. Here’s a few amazing bloggers who also happen to run their own businesses. Roel of Tycoon PH[1] Will you tell us a little bit about the blog and how it started? Since I have served more than 100 businesses around the world through digital marketing, I’ve found out that my real passion is helping entrepreneurs grow their business and take actions. So, I created a platform that can feature information which can help them achieve this mission. You see, too many media startups focus on publishing trivial stuff, celebrity news and gossip. Stuff that doesn’t make people better. Stuff that doesn’t help people decide and influence their life to become better. But we aren’t. We believe in the power of evergreen and high quality contents, and its ability to help people. Tycoon Philippines doesn’t aim to provide news; instead, it provides actionable tips, strategies, ideas, and insights on marketing, business, entrepreneurship, success and money. It should only create articles that can help entrepreneurs or people who want to start their business take action to succeed. What’s the best advice you can…

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5 Ways Minimum Wage Earners Can Save

Saving is a habit, built over time. They say it takes 21 days of consistently doing something in order for a habit to fully form. The challenge of saving presents itself to everyone with a goal in mind. As it is, people reason that they are unable to save because they don’t make enough. With minimum wage in the NCR averaging around Php 481 and Php 349 in provinces, it does make saving seem like a stretch. As author and financial coach Chinkee Tan said “Never allow the lack of money to be a stumbling block.” Saving money begins with the mindset that you can save, and not with a larger paycheck. If you’re working a minimum wage job right now, it doesn’t mean that you’ll be working that job forever. Building the habit of saving requires perseverance, especially as you may not have a lot to work with, in terms of money. Here’s a look at five ways that someone earning minimum wage can build their savings. Start Small Most people think that 10% or 20% of your monthly wage should go to savings. Before you say “that’s too much”, don’t think about the amount. Start by putting away spare change, or smaller loose bills that you end up with each day. When your savings grow, so will the temptation to spend your hard-saved funds. You may want to consider putting the money you’ve saved somewhere you can’t touch it, at least until you can open a bank account. There are bank accounts with low maintaining balances, and some…

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What Would You Do with an Extra Php 5,000?

If there’s one topic among people that never goes out of trend, it’s asking what you’d do with extra cash. We’re not talking about the cash that happens to be leftover unexpectedly, but guilt-free money that you can do absolutely anything with. Sudden windfalls, unexpected gains, or leftover funds are somethings that just happen in life. There are a lot of things you can do with your extra cash, but before you go nuts, here are some things to consider when wondering what to do with extra money. First things first Regardless of the amount that you have, think about what else you might need to prioritize financially. Are you up to date on your credit card bills, any insurance premiums, or any other bills for that matter? If you’re not, put your extra money towards these obligations. An extra Php 5,000 towards your credit card bills can lower your principal balance and the interest you pay on it, for example. But if you’re sure that everything’s been taken care of, then you can think about putting the money elsewhere. What do you want? There are times when it’s okay to put your money towards wants, and this is one of those times. Take note, of course, that you’ll need to fit that want into the extra amount that you have on you. You’ve got an extra Php 5,000 – don’t try and buy something worth twice that amount. Fit whatever it is you want within the amount that you have. Just as you prioritize needs over wants, you’ll need…

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Best Investments For Every Risk Appetite

Last week, Moneymax.ph talked about investment vehicles perfect for beginners. This week, we’ll focus on determining the best investment according to risk tolerance. Your “risk tolerance” is your emotional preparedness when it comes to the highs and lows of investing. You should know by now that investments are not guaranteed. If your risk tolerance is low, you’ll take the chance of gaining 10% along with the chance of losing 5% of your investment. If you’re a high-risk investor, you’ll prefer the chance of gaining 40% even if it comes with the risk of losing 30% of your portfolio. To know your risk tolerance, you can go to your local bank or investment broker, and they can provide you with an Investor Profile Questionnaire. Types of Risk Tolerance Conservative You’re conservative when you’re averse to the idea of losing your hard-earned money even if it means lower gains. If you can imagine yourself withdrawing your investment over losing a few thousand pesos, then your ideal investments would be money market funds and bond funds. Money market funds include bank deposit accounts, time deposits, certificates of deposits (CDs), and fixed-income government and corporate instruments while bond funds include corporate or government bonds. Read more: 5 Smart Reasons to Invest in Bonds Unit Investment Trust Fund: What Is UITF and How Do I Invest? Why are they low-risk? These funds are low risk because investors are promised returns through the form of interest rates. Bond funds are debt instruments where money is lent to corporate and government institutions. These bonds have a fixed…

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The BSP: How to Save on Bank Fees and Charges

Having a bank account apart from a payroll ATM is something that most people forego. Many reason that it’s costly to maintain, or that they don’t have the extra money for it. Even though 80% of the general population doesn’t have a bank account, it’s still an essential part of personal finance, especially when you want to save up. Given that there are fees and charges that come with maintaining a bank account, it’s important to have an understanding of what makes it all up. As such, the Bangko Sentral ng Pilipinas (BSP) urges those who do have bank accounts to read the fine print of the account documents your banks send to you. Just taking this time could save you hundreds of pesos in fees. But how else can you save on bank fees and charges? What to look out for: Among the things in your deposit literature, the BSP encourages that you pay close attention to the following: service fees falling below average daily balance (ADB) dormancy fee ATM transaction fee fee for checks written against insufficient funds interbranch transaction fees Mind the service and transaction fees Banks charge their depositing clients a certain amount for maintenance and transaction. Some of these fees are for deposits that fall below the minimum Average Daily Balance (ADB). Larger fees may apply to excess withdrawals, inter-branch transactions, and if you close the account within a year of opening it. Here’s a sample of fees from a major bank to give you a general idea of what you might encounter. Particulars Fees…

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Before Resting in Peace: 6 Ways to Plan Your Legacy

Memento Mori, or “Remember that you will die”. The fact is that somewhere, sometime down the line, we will die. Everyone would like to pass away peacefully, at a certain age, and surrounded by loved ones. Talking about what happens to you and your family after you die is never easy, especially if you are the main breadwinner. While the conversation can be uncomfortable, it’s something that has to be done in order to ensure your financial legacy. You can never really plan to die, but you can plan your legacy as early as now. Here are a few places to start. Your Will A will determines where your assets go upon your passing. Your last will and testament is a binding legal document that bequeaths all material and monetary assets, as well as items of sentimental value that you leave behind to the people in your life. Why talk about it: If there’s one thing that telenovelas can teach us, it’s that the things that you leave behind are something to fight over. A will can diffuse most conflicts over the distribution of your assets. Power of Attorney A “power of attorney” is another legal document that authorizes someone you trust implicitly to carry out decisions on your behalf if you no longer have the mental capacity to do so. In cases of debilitating sickness, for example, the person with power of attorney decides whether or not life-saving medical care will be given to you based on your instructions. Why talk about it: You must choose someone that you…

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Mutual Funds And UITFs: Investing For Beginners

“Sabi sakin ng kaibigan ko bili tayo ng ganitong investment! Mabilis ang return!” is a phrase Floi Wycoco, founder of The Global Filipino Investors (TGFI) group, commonly hears. Based from his experiences talking with fellow kababayans, some Filipinos jump right into investing without educating themselves first. Everyone wants to make a quick buck without putting in the effort, but if that were possible, then everyone would be rich. Investing is no different, and there are two options you can choose from: Earn in a short amount of time BUT with a lot of effort (e.g. day trading) Earn in a longer amount of time BUT with less effort For the first option, you need to put in the effort of learning. You can’t buy ‘this’ stock because someone you know told you to. You need to know why you’re buying a particular option. This requires looking at a company’s financial statements and being up to date with current events, as well as educating yourself about the basics of stock trading. Not every beginner has time for this. For the second option, mutual funds and Unit Investment Trust Funds (UITFs) are your friends and are perfect for beginners. Why are they perfect for beginners? Mutual funds and UITFs are handled by professionals who do the work for you. They ensure maximizing your gains whilst minimizing risks. All you have to do as an investor is to put in the money. Because of this, mutual funds and UITFs are subject to management fees. To get the most out of your investment, you…

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Exclusive Q&A: TGFI’s Floi Wycoco On Investing

Over the years, investing has been made more available to Filipinos. Through financial literacy seminars and Facebook groups focused on money matters, more people are taking interest in their finances. Take a quick look at personal finance blogs and Facebook groups and you will see that more of our kababayans are asking the important questions.  How can I start investing? What kind of insurance should I get? What are the best stocks to buy? The Global Filipino Investors (TGFI) Facebook group is one of the best avenues to talk about money matters. From how to apply for a stock investing account to the basics of getting life insurance, the 55,000-strong community is more than willing to welcome anyone willing to learn – beginner and expert alike. Moneymax.ph caught up with TGFI founder, Floi Wycoco, to share his story on why he started the TGFI Facebook group and TGFI Web Academy and why he hopes every Filipino will start investing – one of his core pillars to being financially free. Have you always been interested in personal finance? No. When I was a fresh grad with my first job, I was an impulsive spender. The first thing I did with my first salary was to take my friends out and treat them all. On the next paycheck, I went to the casino and gambled everything. Instead of the Filipino tradition of giving a portion of my income to my parents, I kept everything to myself, and that mindset continued for the next five years, so no, during my younger years, I…

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What to Tell Your Kids about Finances

  “Money doesn’t grow on trees.” Every parent says this to their children when attempting to teach them about managing their finances, or trying to curb their spending. The thing about keeping kids in the know about money matters is that kids learn their financial habits from their parents. “Experience is not the best teacher. Learning from other people’s mistakes is the best teacher,” according to wealth coach and author Chinkee Tan. Keeping them in the know about your financial situation helps, but should you tell your kids everything about money? On Income Ordinarily, how much you make is closely guarded information. You never discuss specific amounts with friends and other adult family members, but what about your kids? As kids get older they’ll have questions about money, and you’ll need to be ready to answer. What to say: Use broad terms when discussing the money you earn. The most important lesson your children need to take away from a conversation like this is the value of a paycheck and working hard. Sharing actual numbers is something best left for when they’re closer to working age. Read more:Financial Tips for Moms, from Moms: Learn from These Mommy Bloggers in the Philippines On Spending Kids will wonder how you can afford certain things, or why you won’t buy something that want. They’ll likely get the impression that you’re fairly well off if you buy new appliances and other necessary big ticket items, and become confused as to why you suddenly don’t have money for the latest toy they want. What to…

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4 Reasons Why You’re Not Investing

Investing is a hot topic right now. Every personal finance expert has investing as part of their recommendations for financial health and achieving financial freedom. When you turn on the news or read the papers, everyone’s going on about the stock market and how well it’s doing, and experts are saying that you should start investing now to take advantage. But even after all that, not a lot of people have taken the plunge. According to a 2013 survey by the Philippine Stock Exchange, there were only 585,562 trading accounts in the whole country that year, or a mere 0.6% of the total Philippine population. So why aren’t you investing? Going by probability, you’re likely not one of those 0.6% who has a trading account. There are four main reasons that you might have for not investing: You can’t afford it. To build a balanced portfolio, you’ll need to buy a lot of different stocks in different industries. To do that, you’ll need to invest hundreds of thousands of pesos, at the very least. Not everybody has that kind of money.Plus, if you’re looking at stocks, there are a lot of costs involved, like commission fees payable to your trader, VAT on that commission, Philippine Stock Exchange transaction fee, and others. Selling stocks is even more expensive as you’ll have to pay sales tax. If you’re only going to buy a few thousand pesos’ worth of stocks and sell after a few months, all the fees are going to eat into whatever profit you may have. You don’t know enough…

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What Your Money Should Do for You at Age 50

For a lot of us, turning half a century old seems so far away. It often feels like there’s a lot of time before we’re that old, so we don’t really think about what we could be doing by that age too often. By the age of 50, we do think that we’ll be right where we want to be as individuals, and as professionals in our respective fields. We talked to financial adviser, nurse, and author Lianne Laroya on the subject, and here’s what she had to say. Fifty and free “At age 50, I’d be lounging by a quaint cafe in Paris in the afternoon, sipping a delicious cup of hot chocolate and pairing it with a bit of buttery pastry while I’m organizing my blog post for TheWiseLiving.com and spending the whole day with my loved ones,” she starts. “At night, I’ll be speaking on a webinar on the topic, “How to Retire at Age 35” with young Filipino professionals as the attendees.” Being older means having the means to enjoy life and still do what you love the most. Being able to do something that you live for doesn’t end when you’ve made it. As Lianne said on her blog, she does write for a living, but she also lives for writing. Many entrepreneurship and self-help seminars discuss visualizing your future and what you want to achieve by the time you reach that particular point in your life. Where Lianne sees herself relaxing in Paris, anyone else may dream differently. It’s also one thing to dream,…

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Things to Know About College Fund Saving with the 80-20 Rule

When you become a parent, the question of securing your child’s future education rears its head. You want to give them the best education that you can. With this comes looking at how much it will cost to eventually send them to the university of their choice. With that in mind, you’ll be looking at ways to save the money for your child’s education fund. There are plenty of ways to save, and the first step towards that is to create a budget. One style of budgeting that doesn’t require as much effort is the “80-20 rule”. What is it? The 80-20 rule is a saving formula based off of Pareto’s Principle, or “the law of the vital few.” Proponents of this formula, Harvard economist Elizabeth Warren and her daughter Amelia Warren Tiyagi say that “You should base your budget on your ‘take-home’ income, after taxes and other expenses are taken out of your paycheck.” How does it work? This saving formula simplifies the saving process by splitting off 20% of your income into savings. The remaining 80% is allocated 50% for your needs, and 30% for your wants. While it may be difficult to separate needs and wants, the 20% you take away from your monthly income is an absolute for when you are saving for your child’s education. On a “take-home” income of PHP 50,000, the amount that goes into your child’s education fund each month is PHP 10,000. This amount, multiplied by 15 or 16 years, will give you a total of PHP 1.8-1.92 million. The possible…

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Randell Tiongson: Best Financial Advice from a Father

One of the most difficult things for parents is to talk to their kids about money. As we get closer to Father’s Day, perhaps one of the things you’ve got on your mind is how to impart lessons on your kids regarding money. We got to sit down with financial guru Randell Tiongson, dad of two girls and two boys, and here’s his take on teaching his kids about money: There was even a time when they asked why we wouldn’t travel abroad. When they would compare our situation with others, I’d tell them that we’re different and that every family is unique. While your kids were growing up, what was your first advice to them? What was very important for me, especially when they were growing up, was the concept of delayed gratification. It’s normal to hear “I want this, I want that” from kids asking to get the things they want, but my wife and I taught our kids that there’s a right time for everything. Then, I also taught them the significance of priorities. Di’ba as a dad, you need to provide and secure their future. I remember when my kids were younger, my girls used to compare themselves with cousins and friends asking, “Bakit si ganoon ganito, ganyan”. There was even a time when they asked why we wouldn’t travel abroad. When they would compare our situation with others, I’d tell them that we’re different and that every family is unique. They had to understand that we had our own priorities, and these priorities were roof…

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5 Money Lessons from National Heroes

Independence Day rolls around with a lot of fanfare, and there will be celebrations all across the country. On this day, it also adds that we honor those whose efforts and sacrifice contributed to our eventual liberation. While the men and women we consider heroes set out only to fight for what was right, they also led lives similar to ours. Like us, they worked hard to earn money and found ways to make the most of their paychecks. Like us, they also made good and not-so-good decisions with their money. Here are 5 lessons national heroes can teach us about money. Dr. Jose Rizal – Investing and Debt Management History describes Dr. Jose Rizal as someone who had a thirst for knowledge and as a man of many interests and talents. He was also a practical and frugal person. According to historians, he once won a lottery with friends. Rather than spend his share in one place, he used it to invest in property. The property was developed into a school and a hospital, with the proceeds going towards an abaca business on the same grounds. Like a lot of people today, Rizal also had debts – acquired from when money was difficult to come by. The money he borrowed went towards paying his tuition fees. It’s said that he paid back the money he owed friends as quickly as possible, completely focused on eliminating his debt as soon as he could. Andres Bonifacio – Have more than one income stream In school, we learned how Andres Bonifacio and…

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Exclusive Q&A: The Fausto Brothers on Investing While You’re Young

On May 9, 2015, MoneyMax.ph took part in the Family FQ Workshop by the Faustos headed by Rose Fausto, also known as the FQMom, with her husband Marvin, and their three boys, Martin (25), Enrique (22), and Anton (18). photo via marvingermo.com Most people find it hard to entrust their funds to a market of uncertainty, let alone youngsters who have yet to learn the intricacy of money beyond books. However, the brood proved it wrong and made it seem as easy as their dancing. While the boys’ folks are understood to be veterans in personal finance coaching and have been investment bankers for years, the young surprised the crowd with their natural talent in public speaking, and their substantial insights on saving and investing at a young age. Featured on ANC’s On The Money, the boys share their childhood stories on wealth building. As far as you remember, when did the concept of saving start? Martin: I started saving when I was in first grade. I wanted to buy those BBQ flavored French Fries in school so I knew I needed cash. I especially felt the need for saving in fourth grade when I got my first cellphone. It’s been a house rule that we have to pay for our own cellphone prepaid load, hence, saving was an important habit I needed to master to be able to communicate with my friends. Enrique: I also started saving in first grade when my mother gave me my first weekly allowance of P100. We already had baon, but this cash was intended…

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Signs You’re Financially Ready for a Baby

A survey on family planning showed that around 49 out of 100 women at child-bearing age are using a family planning method. This is just one way that you can explore the possibility of growing your family. Your finances and the way you manage it also play a role in determining whether or not you and your spouse are ready for children. “Think there is never a time where everything will necessarily line up just perfectly on the way to parenthood, whether it’s financially, emotionally, or physically,” says mom and saving advocate Valerie Rhodes, “But there sure are some steps you can take ahead of time to ensure you are in the best position possible to welcome a new little one into your life.” How do you know that you’re financially ready for a baby? You’ve talked about it It is one thing to say “I want us to have a baby,” and another thing to talk about it in terms of finances. When you do talk about it from a financial standpoint, it starts your planning phase as a family. Planning a baby means visiting your doctor regarding the pregnancy. You should also consult your financial advisor regarding your savings. The Sign: You start putting together a budget and newborn checklist that covers potential costs before the baby arrives, and you’ve already considered your future as a family in terms of savings, insurance, etc. You’re financially stable Financial stability means that you and your spouse know your budget, and can balance wants and needs out. You’ve also been working…

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How a Yogini’s Path Led to Financial Peace

If you could go back in time to give financial advice to your 21-year-old self, what would you say? In this new series, our blogger friends share the things they wish they knew about saving money when they were 21. “Transformation can happen only when you are willing to break open your old self to make way for the new one to emerge.” These words by Yin Yoga in Asia Founder Victor Chng are part of Jane Uymatiao’s continuing journey to transforming herself inside and out. Jane is a blogger and yoga practitioner who merges the teachings of the art into her financial health. What money lessons would she share to her 21-year-old self? A Different Time “I am a Type A person. In my younger years, I was an achiever and very competitive in school and at work,” Jane says. “It showed because I graduated high school valedictorian and top of my graduating class in college. At work, I also tried to be one of the best — reason why I was the second woman to be sent on scholarship to a U.S. Ivy League school. Back then, women were sent to a local MBA school while the men were offered scholarships abroad.” Jane is a CPA and began a distinguished 15-year career with SGV. Her drive to excel at work was recognized by the company, earning a scholarship to the Wharton School at the University of Pennsylvania. She moved on to become Vice President and Head of the Corporate Planning Division of a commercial bank, but events in…

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