I will be honest. I do not practice everything that I preach in this blog. I tell people to use the ABUNDANCE FORMULA: 100 = 10 - 20 - 70
Utilize 100% of their God-given talents to maximize their income
Give 10% for tithes
Invest 20% for their future
Live within the 70% for their expenses
I do not follow this formula anymore, particularly with the 20% investment and 70% expenses part. It is mainly because this formula is for newbies. Currently, I have allotted more for investments and less for my expenses.
Why? Two reasons.
First, I have learned to increase my income (through creating money machines called assets) without increasing my expenses. Although there is always something new that technology has to offer, I do not buy it. I have not changed my phone and laptop for more than a year now. As long as these gadgets can serve their main purpose for me, I am okay with that. But this does not mean I am being frugal. I still spend on random trips, seminars for self-growth, gifts for my husband, surprise my kids with rewards for job well done and treat my parents to a spa, haircut or a boxing ticket. I am more careful now with my expenses unlike before.
Second, I have learned the value of investments -- that no matter how hardworking we may be, money can work harder for us. This is because money does not sleep, gets tired or go on vacation. It continues to work for us NON-STOP.
Before money comes in, most people have already spent it through swiping that plastic card to buy that branded shoes or bag which was on sale. They think they have saved a few bucks, but then think again, "Do you really need this?" For those who love shopping, never buy on impulse and remember that you are NOT DEFINED by the brand of shoes or the clothes you wear. Live simply.
If you read the article 15 Frugal Billionaires Who Live Like Regular People, these wealthy men have saved up, lived modestly, and given away huge amounts of money to charity. Mark Zuckerberg, the mastermind behind Facebook, even wore the same gray t-shirt and hoodie to work everyday.
Imagine this, your Php50,000 today invested in stocks can become Php120,000 in 10 years, Php312,000 in 20 years, and Php5 million in 50 years! If you have very young kids, imagine them being multi millionaires even before they retire WITHOUT working for money, but that Php50,000 investment working for them. How cool is that?
So, I urge you to stop imagining and start investing! And soon enough, putting a part of your income regularly will be as automatic as breathing. And it is more rewarding to see your money grow over time, rather than seeing that branded bag stored in your closet.
P.S. Decided to start investing? Email me at jssalandanan@gmail.com with the title "I Want To Start Investing" and we will give you a quotation based on your income and goals.
