We all know that saving money is important but I think saving money alone are for losers. It is not correct that you save money just for the sake of saving money. We hear this often from old people that we study hard,graduate from the best school, work hard and save money and everything will be okay. Saving money is only part of achieving Financial Independence but it is not the only way to achieve your financial goals in the future. You should not focus only at saving money but it should be your foundation for you to start your journey to Financial Independence.
Your focus should be from Saving Money to Growing your Money. Have you heard about Save-Spend-Save-Spend Cycle? This cycle is deadly because this kind of mindset is only to save and then spend for the short term. After 40 years of working upon retirement,for sure this kind of mindset will have no assets to rely for his daily expenses because of not preparing for the future.
Saving money should not be the only goal, you have to learn how to grow it. It is not enough that you just set aside money because your money will be eaten up by inflation. Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase.It is important that you have to create a Financial Plan where you can benefit to grow your money and beat inflation.
Invest, Grow and Preserve is what I advocate to every individuals and groups that I talk to. After saving enough money to cover your 3 months salary, the next step should be know where to invest your money that there’s a potential to grow to beat inflation in the long run like Equities, after growing your money you have to know a Financial plan that can help you preserve your money that if death comes in the future,your money will be intact and it can provide for your family’s financial needs even without you.
Let’s say you can invest Ph100 per day and you are 29 years old for only 10 years, this is where your P100 per day can take you:
This Financial Plan is called Variable Unit Linked(VUL) where your money is invested in Phil.Stock Market which can grow overtime and it has a life insurance coverage if death comes. So let’s say the money earns 10% per year at age 60, you will have Ph4,175,831.37 which you can use for your retirement. It has a life insurance coverage of Ph500,000 so if death comes at age 60, the beneficiaries will receive the guaranteed death benefit of Ph500,000 plus the fund value of Ph4,175,831.37 if it earns 10% per year, the total Death Benefit will be Ph4,675,831.37 which cannot be taxed by the government if the beneficiaries are designated as irrevocable. The money that you have in VUL can be withdrawn after 10 years either partial or full withdrawal. You can also add other benefits which the policyholder can use like accident insurance,Dread Disease Rider, and Hospitalization fund.
Now, will you just focus on saving money only? Saving money will make you lose the value of your money overtime. So,don’t just focus on saving money but rather from saving money, learn to grow it by investing and protect yourself as well with life insurance.
Thanks for reading my blog, if you want to know how to grow your Ph100 per day, you may reach me and have a consultation from me.