1. "I don't have enough money." ~ "Di ko priority yan."
Question: Do you think you can save P33/day?
Yes? Okay. Let's compute.. P33/day multiply that by 30 days, that'd be equal to P999/month. Here's the thing. Do you know that if you save at least P1000 a month in the next 20 years and invest it on an investment vehicle that will earn at least 12% at an average, it could amount to P1M.
My question now is, how can you make sure that you are able to set aside at least P1000/month? Check your expenses. Cut down what is unnecessary. And here's a tip, instead of using this type of budgeting: Income - Expenses = Savings, why don't you try this instead,
The Abundance Formula: Income (100%) - Tithes (10%) - Savings (20%) = Expenses (70%).
Practice living within your 70%. Be deliberate and make it a point to set aside your 10% and 20% for your eternal and earthly investments respectively. This formula is actually one of the biggest secrets of the truly rich. They make sure to always spend less than what they earn and save as much as they can.
Just to be clear, I'm not an advocate of the "Suffer now, enjoy later." cause the truth of the matter is, we can enjoy now without compromising our enjoyment for the future. Simply follow the abundance formula.
Kaya mo naman! It's just a matter of prioritization.
2. "I don't need to invest." ~ "Okay na ako sa 15th at 30th.."
Question: May balak ka bang mag retiro sa trabaho mo?
Kung isa kang empleyado hindi ka habang buhay may sweldo. Walang forever ang 15th and 30th mo.
Here's another fact, did you know that only 2% of retired population are financially independent while the rest are either nakaasa sa anak, pipilitin paring mag trabaho, or worst they will be left in the home for the abandoned elderly. Why? Because they were unable to secure their financial futures.
One of the biggest money mistakes that people commit is that they don't have financial goals. Well maybe they do but they're usually just the short-term ones like buying a car, getting a house and lot, saving up for a wedding, traveling and the like but they fail to create financial goals for their retirement. That's why in less than 5 years after their retirement they're already broke.
The only way that we can avoid this is by making sure that we invest and save up for our retirement. Now let me give you another tip, make sure that you identify your financial goals. What do you want to do when you retire? How much money do you want to have every month after retirement? How much will you set aside for your medical needs? Create a plan and find ways to achieve it.
3. "It's too risky for me." ~ "Sa banko nalang or sa vault."
Question: How much does your money earn in the bank? What is the interest rate of your savings account? Is it higher than inflation?
Let me shake you up a little, if you are not beating inflation, which is at an average rate of 4-5%, then I'm sorry my friend but you're actually just allowing your money to lose its value. I won't explain how inflation works. But you may learn more about it from the video below.
4. "I'm too young for that." ~ "Madami pa akong time!"
Here's the reality which you might be forgetting or taking for granted – as you age you don’t get any more time. None of us will ever do. Kapag lumipas na, lumipas na. As a matter of fact, the older you get, the more responsibilities and obligations seem to pile up. You will eventually need to pay for your own bills, buy a house, get married, and then have kids, the next thing you know is that your list of responsibilities is endless. Unless you plan on waiting until you are retired from your job, or you're able to let all your kids finish schooling before you start investing, you are never going to have “more time”. Quit saying “Bata pa ako.” as an excuse not to invest. You can’t afford to wait! Maximize your time and energy. Make the most out of your productive years.
Check out my previous blog and see why you shouldn't be wasting your time.
5. "I don't know anything about investing." ~ "Nakakatamad aralin."
Question: Kailan mo balak matuto? May balak ka ba talaga matuto?
The earlier that you start learning about investing the better ~ you will be able to save yourself from many money mistakes and headaches, and more importantly you will be able to acquire more ~ more knowledge and more assets as well.
The great advantage of our generations is that it's much easier for us now to learn new things. The internet is full of great articles and blog posts. Plus, there are a lot of institutions and individuals nowadays that offer financial literacy seminars. Just make sure that you attend the legitimate ones. And of course, go to a bookstore near you and go buy yourself a book! I suggest that you read a book written by Bo Sanchez, it's very practical. Try starting with "The 8 Secrets Of The Truly Rich".
Anyway, let me end with this quote..
If you wanna learn more about financial literacy feel free to attend our
Practical Money Management Seminar. To know more about it, click the
"I Wanna Know More!" button below.
About the Author
Chai Santiago is a graduate of Manufacturing Engineering and Management from De La Salle University who later on found her passion and purpose in the Financial Education industry. She is a Certified Financial Educator® (CFEd®) under Heartland Institute of Financial Education (HIFE) and a Financial Coach at International Marketing Group (IMG).