ENTREPRENEURSHIP

5. Becoming debt-free
Lesson 01: Wealth Creation 6. Cutting on unnecessary expenses
7. Don't mix insurance with
investments
Philippians 4:19
But my God shall supply all your need
according to his riches in glory by
Budget
Christ Jesus.
> A plan that shows you how you can
Wealth Creation spend your money every month.

> It can help you to make sure you do

- It means increasing the level of
not run out of money each month.
money
- Getting rich
> It will also help you save money for
- Investing to increase money
your goals or for emergencies.
- Increases the number of assets
owned by an individual, a family,
community, organizations, and Creating Budget in 5 Steps
country.
- Combination of all financial 1. Figure out your after-tax income
planning and investment advice 2. Select an appropriate budget plan
for the betterment of the assets 3. Track your progress
owned by an individual, family, 4. Automate your savings
or company. 5. Revisit your budget as needed.
- Process of producing a supply of
assets like stocks, gold, cash,
bonds, and real estate; that are Investment Investor
considered to be sufficient in
generating a stable source of Putting your money An individual that
income to help in livelihood. in an asset with puts money into an
the aim of entity such as
generating income business for a
Importance of Wealth Creation
financial return

1. Regular source of income

2. Healthy retirement
Categories of Investment
3. Goal-based investing
1. Ownership Investments
2. Fixed assets: land, building,
Ideal Wealth Creation Plan
machinery
3. Stocks
1. Creating a budget
4. Valuables like antiques,
2. Invest rather than just saving
collectibles
3. Understand the impact of
5. Business capital
inflation on saving
6. License and trademark
4. Investing in appreciating
7. Lending investments
assets
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Property, land, buildings, and all air

8. Debentures
right above the land, and underground
9. Government bonds
right below the land.
10. Certificate of Deposits (CDs)
1. Residential
11. Cash Equivalents
2. Commercial
12. Money market funds
3. Industrial
13. Savings account
14. Funds
Collectibles and Objects
15. Mutual funds
1. Signed Lionel Messi Jersey
16. Hedge funds
2. Da Vinci paintings
17. Index funds
18. Exchange traded funds (ETFs)
Lending Investment
19. Alternatives
● Debts you buy, expecting to be
20. Precious metals
repaid
21. Venture Capital
● Bank
22. Real Estate Investment Trusts
● Low-risk, low-reward investments
(REITs)
23. Commodities
Bond
● umbrella term for any type of
Ownership Investment debt investment
Becoming a partial owner of a company ● Can be issued by companies or
or piece of property through the governments and generally pay a
purchase of investments such as stock, stated interest rate.
growth mutual funds, and real estate. ● Market value changes over time
(more or less attractive to
Entrepreneurship Entrepreneur potential buyers)
● Shorter maturities (length until
Ability and An individual who full repayment) - lower interest
readiness to creates a new
develop, organize business, bearing Cash Equivalents
and run a business most of the risks • The total value of cash on hand that
enterprise, along and enjoying the includes items that are similar to
with any of its most of the cash; cash and cash equivalents must be
uncertainties in rewards. current assets
order to make a • Company's combined cash or cash
profit. equivalents is always shown on the top
line of the balance sheet since these
assets are the most liquid assets.
Small business ideas
● Sari-sari store
Money market funds
● Ukay ukay
• Type of mutual fund that invested
● Cellphone loading
low-risk, short-term debt securities,
● Coffee shop
such as treasury bills, municipal debt,
● Carinderia/Home-cooked meals
or corporate bonds.
• Designed to offer a safe, stable
Stock
investment option for money you may

Real Estate
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need to access in the short Term, like

an emergency fund or a short-term goal.
Effects of Inflation

Certificate of deposit (CD)

• Type of savings account offered by 1. Wage pressure
banks and credit unions 2. Less competitive
• Withdrawing money early means paying 3. Real debt level fall
a penalty fee to the bank 4. Less confidence to invest
5. Economic growth
Best investments in PHL 6. Cost-push inflation
• Stocks (Philippa Stock Exchange for
OFWs)
• Mutual funds and UITFs
• Bonds Money saving tips:
• VUL insurance investment
• PAG-IBIG MP2 savings
• Real estate • Check your earnings
• Business • Income - savings = expenses
• Set monthly budget
Variable universal life (VUL) insurance • Eliminate dent
Permanent life insurance policy with a • Avoid impulsive spending
savings component in which cash value • Decide your priorities
can be invested. • Set saving goals
• Watch your savings grow
Reason to start investing:
To keep money safe, to grow money, to
have a stable income, to achieve
Six Laws of Wealth
financial goals
• Save at least 10%
• Invest so it will multiply
Impact of Inflation on Savings • Avoid debt
• Invest in solid business that is
long-term
Value of money - d, price - up
• Gain knowledge and skills to increase
your earning power
Cost-push inflation - production costs
• Safeguard your growing fortune with
rise and producers pass the increase on
diversification and insurance.
to the consumers. Increase in the cost
of raw materials.

Demand-pull inflation - demand goods

increase and exceed production
capacity. Government spending, overseas
growth. Demand for goods or services
rises faster than the supply. Increase
of aggregate demand. When supply cannot
meet growing demand, prices for goods
and services are pulled higher.
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Entrepreneurship

Lesson 02: Entrepreneurship and the

- Pursuit of starting, managing,
Philippine Economy
and scaling a business.
- Involves combining innovation,
The major economic sectors in the skills, and vision to develop new
Philippines are the following: products, services, or ideas that
● Manufacturing sector meet market demand and create
● Agriculture sector value for a target audience.
● Private services sector - Those who choose this path often
● Trade sector take on financial risks and
require resilience and
Manufacturing Industries problem-solving skills.
Production of goods in large quantities - Can also apply to other types of
after processing from raw materials to self-employment, such as online
more valuable products is called content creators and consultants.
manufacturing.
Entrepreneur
People employed in the secondary
activities manufacture the primary - Someone who develops an
materials into finished goods. enterprise around innovation.
- They manage the business and
Agricultural Sector assume the risk for its success.
Includes crop and animal production, as
well as agricultural engineering and
Richest Filipinos in Forbes’
production of agricultural machinery,
fertilizers, and other kinds of 1. Manuel B. Villar Jr.
products to support farming. 2. Enrique K. Razon Jr.
3. Ramon S. Ang
Private Sector 4. Hans T. Sy
5. Henry T. Sy Jr.
Generally provides goods and services
6. Herbert T. Sy
only for the people who pay for them
7. Lucio C. Tan
directly, either by making a purchase, 8. Harley T. Sy
subscribing to a service, or signing a 9. Teresita T. Sy-Coson
lease. 10. Elizabeth T. Sy
11. Andrew L. Tan
Private sector companies exist to make a 12. Tony Tan Cakting
13. Lucio L. Co
profit so that they can pay their
14. Susan P. Co
employees and continually improve their 15. Lance Y. Gokongwei
businesses. 16. William T. Belo

Trade
A voluntary exchange of goods and Top 10 Richest Men
services between economic actors such
1. Elon Musk - Tesla, SpaceX
as consumers, companies, and nations.
2. Jeff Bezos - Amazon
3. Mark Zuckerberg
4. Bernard Arnault
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5. Larry Ellison - Oracle 7. National defense

6. Warren Buffet 8. Regulate labor markets
7. Larry Page 9. Protection of the environment
8. Bill Gates
9. Sergey Brin
10. Steve Ballmer Why is government important in the
economy?
1. Provides the legal and social
Household Economy
framework within which economy
Collective economic activities of
operates
households.
2. Maintains competition in the
marketplace
Often called the household sector as
3. Provides public goods and
distinct from the business, government,
services
and foreign sectors. However, the
4. Redistributes income
household sector is large enough to
5. Corrects for externalities
deserve the term household economy.
6. Takes certain actions to
stabilize the economy
Role of the household in an economy

Economic Freedom
- vital role in that they set what
- Fundamental right of every human
is made by and bought from
to control his or her own labor
businesses.
and property.
- determine what goods and services
- In an economically free society,
they need and want, thus driving
individuals are free to work,
the economy.
produce, consume, and invest in
- Creates a demand for a certain
any way they please.
product, and businesses will
supply it.
Factors of Economic Development
- Political stability
Government
- Macroeconomic stability
- Levels of infrastructure
- Is the institution through which
- Natural resources
a society makes and enforces its
- Educational standards
public policies.
- Saving rate/foreign aid
- Made of those people who exercise
- Barriers to trade
its powers, all those who have
authority and control of the
Political stability
people.
- Political stability and absence
of violence measures perception
Functions of a government of the likelihood that the
government will be destabilized
1. Maintain law and order or overthrown by unconstitutional
2. Raise taxes
or violent means, including
3. Provide public goods
politically-motivated violence
4. Minimize inequality
5. Reduce market failure and terrorism
6. Macro=economic stability
Macroeconomic stability
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> Exists when key economic another, wic can take the form of a
relationships are in balance – for gift, grant, or loan. Most people tend
example, between domestic demand and to think of foreign aid as capital but
output, the balance of payments, fiscal it can also be food, supplies, and
revenues and expenditure, and savings services such as humanitarian aid and
and investment. military assistance.
> Need not necessarily be in exact
balance. How does saving rate affect economic
growth?
Infrastructure
Set of facilities and systems that The relationship between saving and
serve a country, city, or other area, economic growth is a direct one because
and encompasses the services and increasing saving rates raise the rate
facilities necessary for its economy, of economic growth and vice versa.
households and firms to function.
Under low savings rates, it is
Four Economic Resources: difficult to achieve high rates of
1. Land investment; this decline in savings and
2. Labor investment level hinders growth
3. Capital opportunities.
4. Technology (Entrepreneurship)
3 Common Barriers to Trade
Technology is sometimes referred to as The major obstacles to international
entrepreneurship. Natural resources trade are natural barriers, tariff
that are used in the production of barriers, and nontariff barriers.
goods and services.
Natural Barriers to Trade are those
Education is intrinsically linked to barriers imposed by nature or are due
economic growth, influencing economic to cultural clashes between countries.
returns for both personal salaries as
well as national gross domestic product The most common example of a Natural
(GDP). Trade Barrier would be mountains.

It is commonly considered as an Take the case of Afghanistan. The

investment in human capital – the more country is surrounded by mountains to
a country invests in its education its eastern side.
systems, the greater its economic
performance overall. Tariff Barriers
● Tariff means Tax or duty
Research also shows that countries with ● Tariff barriers are the tax
higher numbers of people attending barriers or the monetary barriers
schooling see faster economic growth imposed on internationally traded
than countries with fewer educated goods when they cross the
workers. national borders.
Foreign Aid
Refers to any type of assistance that Non-tariff barriers to trade include
one country voluntarily transfers to ● Import quotas, special licenses
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● Unreasonable standards for the ● Entrepreneur is one who

quality of goods undertakes to organize, manage,
● Bureaucratic delays at customs and assume the risks of a
● Export restrictions business.
● Limiting the activities of state ● Although no single definition of
trading entrepreneur exists and no one
● Exporting subsidies profile can represent today’s
● Countervailing duties entrepreneur, research is
● Technical barriers to trade providing an increasingly sharper
● Sanitary and phyto-sanitary focus on the subject.
measures
● Rules of origin A summary description: Entrepreneurship

Main Economic Activity in the Robert C. Rondstadt

Philippines ● The dynamic process of creating
incremental wealth
Major industries of the Philippines ● This wealth is created by
1. Manufacturing - mining and individuals who assume major
mineral processing, risks in terms of equity, time,
pharmaceutical, shipbuilding, and/or career commitment of
electronics, and semiconductors providing value for a product or
are the focus. service.
2. Agribusiness ● The product or service itself may
or may not be new or unique but
The Philippines is one of the most the entrepreneur must somehow
attractive pharmaceutical markets in infuse value by securing and
the Asia-Pacific region. allocating the necessary skills
and resources.
Entrepreneurship: A Mindset
● Entrepreneurship is more than the An Integrated Definition
mere creation of business:
○ Seeking opportunities Entrepreneurship
○ Taking risks beyond > a dynamic process of vision, change,
security and creation.
○ Having the tenacity to > requires an application of
push an idea through to energy and passion towards the creation
reality and implementation of new ideas and
● Entrepreneurship is an integrated creative solutions.
concept that permeates an
individual’s business in an > Essential ingredients include
innovative manner. > the willingness to take
calculated risks – in terms of time,
The Evolution of Entrepreneurship equity, or career.
● Entrepreneur - French, > the ability to formulate an
entreprendre meaning “to effective venture team; the creative
undertake” skill to marshal needed resources.
ENTREPRENEURSHIP

> the fundamental skills of

building a solid business plan. 18th Century
> the vision to recognize The person with capital was
opportunity where others see chaos, differentiated from the one who needed
contradiction, and confusion. capital.

Nature & Development of The entrepreneur was distinguished from

Entrepreneurship the capital provided.

Historical Evolution Of Entrepreneurship One reason for this differentiation was

the industrialization occurring
Earliest Period throughout the world.
The Capitalist: a passive risk bearer
The Merchant-adventurer: took the Eli Whitney was an American inventor
active role in trading, bearing all the best known for inventing the cotton
physical and emotional risks. gin. This was one of the key inventions
Marco Polo: a merchant-adventure who of the Industrial Revolution.
traveled China.
- As a go-between Marco Polo would Late 19th and earlier 20th century
sign a contract with the money Viewed from an economist’s perspective
person to sell his goods.
- When the merchant-adventurer Entrepreneurs were not distinguished
successfully sold the goods and from managers.
completed the trip, the profits
were divided. Middle of 20th century
Entrepreneur as an innovator
Middle Ages
Entrepreneur: an actor and manager Andrew Carnegie is one of the best
- Did not take any risks examples of this definition
- Who managed large production
projects using the resources He made the American steel industry one
provided, usually by the of the wonders of the industrial world,
GOVERNMENT OF THE COUNTRY preliminary through his unremitting
competitiveness rather than his
17th Century inventiveness or creativity.
Entrepreneur: a contractual arrangement
with the government to provide goods Resources and resources needed for the
and services. business
- The CONTRACT PRICE was fixed. 1. People
- Resulting profit or losses were 2. Money
of the entrepreneur’s. 3. Space
- John Law, a Frenchman established 4. Equipment
a ROYAL BANK (later on developed 5. Technology
as franchise) 6. Marketing
- Richard Cantillon: RISK-TAKER 7. Licenses and permits
(a noted economist of 1700’s & founder 8. Insurance
of the term entrepreneurship.) 9. Compliance
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10. Industry associations ● Assumes two producing two goods

and using one factor of
Importance of Entrepreneurship production.
● Innovation ● The goods are assumed to be
● Technological development identical, or homogeneous, within
● Enhances standard of living and across countries.
● Promotes research and development ● Workers are assumed to be
● Developing communities’ and identical in the productive
countries capacities within, but not across
countries.
Challenges of Entrepreneurship ● Countries should specialize in
1. Financial constraints producing goods they can produce
2. Market uncertainty most efficiently, and trade for
3. Competition other goods.
4. Time management ● This international trade allows
5. Hiring and retaining talent for greater overall efficiency
6. Regulatory compliance and an increase in the standard
7. Scaling the business of living in all participating
8. Emotional resilience. nations.

Economic Theory John Maynard Keyne was an early 20th

● An economic theory is a set of century British economist, best known
ideas about the economy that has as the founder of Keynesian economics
been organized in a logical and the father of modern macroeconomics.
framework. Most economic theories
are developed in terms of an Hallmark of Keynesian economics
economic model. - The idea that governments should
● Economic model is a simplified actively try to influence the
description of some aspect of the course of economies, especially
economy, usually expressed in by increasing spending to
mathematical form. stimulate demand in the face of
recession.
Laissez-faire Theory
● French phrase - “allow to do” Harrod-Domar Growth Model
● Refers to a political ideology - Sir Roy Harrod in 1939 and Evsey
that rejects the practice of Domar in 1946
government intervention in an - Explains growth in terms of the
economy. level of saving and productivity
● The state is seen as an obstacle of capital
to economic growth and - Production = consumption good +
development. capital goods
● The term originated in the 18th - Investment > capital formation
century during the Industrial - Saving means delaying present
Revolution. consumption
- Growth depends on investing
Ricardian Theory savings in increasing capital
stock.
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Reasons Innovation Is Important for

Kaldor Theory Businesses
The principle of the Multiplier can be - Innovation grows your business.
applied to the theory of distribution Business growth means increasing
of income if the level of income is your profits.
taken as given. - Helps you stay ahead of the
competition.
Also insisted that the share of profits - Helps you take advantage of new
in income depends simply on the ratio technologies.
of investment to output, given the
wage-earners’ and capitalists’
propensities to save.

Innovation Theory Joseph Schumpeter

Stresses the role of innovators or
entrepreneurs in economic development.

Diffusion of Innovations Theory

How new technological and other
advancements spread throughout
societies and cultures.

Innovation
Transforming an idea into something
useful – new things or development of
new things.

Diffusion of Innovation
The diffusion of innovations theory
seeks to explain how and why new ideas
and practices are adopted, with
timelines potentially spread out over
long periods.

Designed in two process:

Diffusion is a macro process concerned

with the spread of a new product from
its source to the consuming public.

Adoption is a micro process that focuses

on the stages through which an
individual consumer passes when
deciding to accept or reject a new
product.