Rose Fres Fausto, best known as FQ Mom, believes raising her children with High FQ or Financial Intelligence Quotient is arming them with Economic Self-Defense. Rose speaks various topics like financial literacy, purposeful parenting, relationships, Behavioral Economics, you name it.
She is a graduate of Economics from Ateneo de Manila University and had a five-year stint as a Financial Consultant to a USAID project on renewable energy.
Aside from being a sought-after speaker and regular contributor at philstar.com, she is also an author of two books, The Retelling of the Richest Man in Babylon and Raising Pinoy Boys. RBT is so privileged to feature Rose Fres Fausto as our resource person.
On Personal Life
RBT: Could you please tell us a brief background about yourself and a typical life of your family?
Rose: I was an investment banker before I decided to be a full time homemaker in order to devote more time and attention to my young sons. Marvin and I have been married for 27 years now. Our sons Martin, Enrique and Anton are now all grown up aged 26, 23, and 20.
RBT: How do you balance a busy life from being a mom to your children, wife to your husband, and writing articles and giving presentations?
Rose: It’s a matter of setting priorities and scheduling activities. When the boys were young, I was focused on them. I was their tutor and they saw me at home everyday. That’s why I decided to give up my investment banking career because it was the type of job that would not allow me to be involved meaningfully in the everyday activities of our children.
While a housewife I still had projects here and there to keep my sanity. While it may not be easy for some women to give up their career (it also wasn’t for me but it was a well thought out decision), it’s best if parents can design a way that they are on top of what’s happening in their children’s everyday lives.
Those critical years are so precious and you can never turn back the hands of time.
So when they were all grown up, I decided to do something else. I started writing my first book Raising Pinoy Boys and spending much time writing articles and giving presentations.
RBT: What are your advocacies as a mother?
Rose: My dream is that all parents will raise their children as talented, honest, and competent Filipino kids who will do the right thing whether someone is looking or not. Through purposeful parenting, I believe its possible.
Purposeful parenting means taking the full responsibility of raising children instead of passing the blame to social media and school environment. Parents and the home are still the greatest influence in our children. Raising our children well is the greatest contribution parents could give to our country. It is also the best service we could offer to God.
On Teaching Kids about Money Management
RBT: Tell us something how important it is to raise children with high FQ or the right mindset in handling money? How do you find your kids on board in stock market investing and mutual funds?
Rose: My website FQMom.com has a tagline, “Raising our children with high FQ is arming them with Economic Self-Defense!” and I strongly believe in this. Parents oftentimes interfere in the course or career that their children should get into. The main reason is that we as parents don’t want them to get hungry. You see a lot of parents who discourage the artistic inclinations of their kids because “ayaw nilang magutom ang anak nila!”
But the reality is we don’t exactly know what job or industry will do well when our children enter the workforce. But we do know that when they work on their gifts, the likelihood of their success is higher.
What we could do is to support them and hone their gifts from God. We could also teach them the basic laws of money so that we could sit back, relax and allow them to follow their passion. And that is what I mean by Economic Self-Defense.
For instance, have healthy discussions about money as a family. It starts at home. That is how we got our kids to be in control of their money. It starts by simply teaching kids to save at least 20 percent of their school allowance.
RBT: What do you think are the challenges why parents do not have initiative or passion to teach their children about financial literacy?
Rose: Again, the challenge is how to have a healthy discussion about personal finance at home. It’s also probably because they are not comfortable with their own FQ. What is my advice? Parents should remember that FQ is not a usual skill set that can be taught in textbooks and schools. It’s a value system and values are better caught than taught, so parents, regardless of FQ, are the best teachers.
RBT: Many people think investing is complicated and risky. How do you explain it in simple language?
Rose: I explained to my children that investing is making your money work for you. If you put your money in your savings accounts, its purchasing power will just go down because of inflation (or pagtaas ng bilihin).
There are two basic kinds of investments– fixed and equity and we told them that they can be co-owners of the companies that they themselves patronize. They were very happy to see their names on their stock certificates of Jollibee and other stocks that are easy to understand.
Later on, I realized that it was probably simpler for us to teach our children about money because my husband and I have good background in finance (my husband is the founding president of the Fund Managers Association of the Philippines).
So what about the others who are not familiar with finance jargon? Then I realized that whether you’re a finance person or not, you can (and should) be the one to teach your children about money.
This has inspired me to write a book The Retelling of The Richest Man in Babylon which talks about three basic laws of money: pay yourself first, get only into a business you understand and seek advice from competent people, and make your gold work for you.
RBT: “I am still young and I don’t think I have to be serious on saving and investing.” How would you respond to this mentality?
Rose: You are still young and you are in the best position to start the habit of saving and investing. Remember, the greatest ally of investing is not timing but TIME.
RBT: What is your practical advice about retirement for many OFWs?
Rose: We have to reinvent retirement. I have an entire course that talks about retirement – how it was invented, etc. Bear in mind that when it was invented to happen at the age of 60, most people did not live up to that age. Nevertheless, life spans have increased significantly and we can’t depend solely on pension funds to take care of us anymore.
Retirement now has to be viewed as starting over. Hopefully, by age 60 you should have set aside a reasonable amount of retirement fund without depending on your regular salary. Why? Now is the time to explore and find your passions.
If you have not done the things that you felt were really your passion because you chose the sure cash-flow, this is the time to do them. Do the things that you’ve always wanted to do if money and shame are not holding you back. You should not stop learning and most of the time learning goes with earning.
But most of all, enjoy this chapter in your life.
For OFWs, bring home a skill you mastered abroad and apply it here. Being generous to your relatives is fine but they should also prepare for their own retirement.
On Spending Habit and Debt
RBT: Any workable tips for those people with overspending habits and impulsive buying?
Rose: Ditch the credit card if you’re not a responsible shopper and track your expenses. Have a Balance Sheet that you update every quarter so you know how to achieve your financial goals. Do they still have hope? Everyone has hope if he/she opts to have one.
RBT: When was the last time you’ve encountered people who felt guilty about his/her expenditure? How did you advise him/her?
Rose: I used my son’s advice to his fellow millennials, “If you pay yourself first (the first basic law of money), then you can spend the rest without guilt.” And of course, the third law of money to make your gold work for you is expressed in an FQ Mom Guideline: “Buy luxury only if you can afford to buy 10 pieces of it!”
RBT: Extreme worry or distress is the ultimate result of mismanaging financial resources. Any practical tips on how to avoid chronic debt?
Rose: Never get into credit card debt. It’s ridiculous how people carelessly get into credit card debt that charges 36 percent per annum and then they keep some money in their savings account that earns nothing.
Good debts are only for purchases such as buying a house (because usually it’s very hard to come up with the entire amount in cash) and this asset increases in value and it’s a long-term asset; business if borrowing money would help you accelerate the growth of your business. But for clothes, luxury, etc., you should not be getting into debt. If you don’t have the money for it, then don’t buy it.
On Setting Goal
RBT: Year 2017 is a new beginning and many people have set their resolutions and goals. How do you set your financial goals?
Rose: It all starts from your life goals. You should know clearly what you want to achieve in life with matching timetable, then the financial goals follow. If it’s a short term goal, keep the money for it in fixed income assets such as money market placements and time deposit.
If it’s a long term goal such as college education for a still young child and retirement, invest in equity for this is the asset class that provides the highest return in the long term. If medium term, then have a combination of fixed and equity.
As a family, we have a year-end assessment and setting of goals. This way we are also aware of each other’s goals and helping would be easier. We also have family goals and setting these together help us become closer and more loving as a family.
RBT: Thank you so much Rose for sharing your experience about money matters.
Rose: It’s my pleasure, Jun.
“We were not taught financial literacy in school. It takes a lot of work and time to change your thinking and to become financially literate.” –Robert Kiyosaki
P.S. 2 Are you an OFW? I encourage you to join the TrulyRichCub (TRC) if you want to be financially literate: Join TRC Today!
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