Time check 11:15 p.m., Tuesday.
I just got home from work. My counterpart had a focused group discussion with selected doctors. Our speaker invited bank personnel to discuss investment products to him and his wife after the lecture. Since our guest doctors had left and my counterparts and I had nothing else to do, we opted to listen to their presentations as well.
They talked about the stock market, insurance, mutual funds, auto and housing loans.
The topic was quite interesting, actually my favorite, that we talked about it even after our doctors and the bankers had left.
One was the housing loan. We are five in the group. Three have availed of a housing loan, one is planning to, while one has absolutely no plans.
Admittedly, I am the one who has no plans. I mean, no plans at the moment, so to speak.
Seven Digit Loans Scare Me -- as in!
This morning, my mother told me that she was given a residential lot by her rich sister. Since the lot was already free, she asked me if I would want to get a housing loan. My response was a sound NO.
Why?
Yes, I dream of building a beautiful house for my parents but not majority of the amount through a housing loan.
Honestly, the thought of huge interest rates is already excruciating for me -- what more of actually being enslaved by it. I do not like the idea of working for banks through loans. If I have a loan that big, I would not be able to retire from my job and pursue my passion whenever I want to.
I have shares of BDO, BPI and Metrobank in the stock market. As these banks earn from clients' loans, I earn, too. And right now, I would prefer things as that. I am THAT scared of loans.
Why Borrow When You Can Buy in CASH?
Yes, it's against the norm, but it is not IMPOSSIBLE to build a house without borrowing money.
My friend once said, "Unless you borrow, you will not be able to buy anything."
I disagree. I firmly believe that this is one of the purpose of investment -- for us not be slaves of debts.
And this came to mind. Instead of paying Php20,000 per month (estimate) as amortization, what if I invested Php20,000 per month in the stock market for TEN YEARS the moment I started earning thirteen years ago? That was in 2013 and I was only 21 years old then.
Okay, let's do the math.
Below is a sample computation of investing Php240,000 per year (Php20,000 per month) in the stock market for ten years through a VUL starting at age 21, with a MINIMUM insurance coverage of Php1.2M if by natural death, or Php2.4M if death by accident.
Because at age 21, I have my parents as dependents, so insurance is a definite MUST. The accidental benefit rider is also very important because I work as a field man.
| Policy Year | Attained Age | TOTAL PREMIUMS PAID | ILLUSTRATIVE BENEFITS | |||||
| Full Withdrawal Value | Death Benefit | |||||||
| Low (4%) | Medium (8%) | High (10%) | Low | Medium | High | |||
| 1 | 22 | 240,000.00 | 98,663.19 | 102,478.67 | 104,386.51 | 1,298,663.19 | 1,302,478.67 | 1,304,386.51 |
| 2 | 23 | 240,000.00 | 238,565.81 | 251,885.46 | 258,659.98 | 1,438,565.81 | 1,451,885.46 | 1,458,659.98 |
| 3 | 24 | 240,000.00 | 433,984.53 | 465,084.80 | 481,160.80 | 1,633,984.53 | 1,665,084.80 | 1,681,160.80 |
| 4 | 25 | 240,000.00 | 674,660.00 | 734,220.08 | 765,511.70 | 1,874,660.00 | 1,934,220.08 | 1,965,511.70 |
| 5 | 26 | 240,000.00 | 924,962.48 | 1,024,886.19 | 1,078,297.70 | 2,124,962.48 | 2,224,886.19 | 2,278,297.70 |
| 6 | 27 | 240,000.00 | 1,210,237.07 | 1,364,725.58 | 1,448,762.29 | 2,410,237.07 | 2,564,725.58 | 2,648,762.29 |
| 7 | 28 | 240,000.00 | 1,506,775.54 | 1,731,601.96 | 1,856,121.65 | 2,706,775.54 | 2,931,601.96 | 3,056,121.65 |
| 8 | 29 | 240,000.00 | 1,815,175.55 | 2,127,828.45 | 2,304,216.95 | 3,015,175.55 | 3,327,828.45 | 3,504,216.95 |
| 9 | 30 | 240,000.00 | 2,135,911.56 | 2,555,753.06 | 2,797,121.78 | 3,335,911.56 | 3,755,753.06 | 3,997,121.78 |
| 10 | 31 | 240,000.00 | 2,469,477.01 | 3,017,911.64 | 3,339,317.10 | 3,669,477.01 | 4,217,911.64 | 4,539,317.10 |
| 11 | 32 | 0.00 | 2,592,614.74 | 3,290,586.52 | 3,708,616.12 | 3,792,614.74 | 4,490,586.52 | 4,908,616.12 |
| 12 | 33 | 0.00 | 2,721,958.61 | 3,588,020.28 | 4,118,907.33 | 3,921,958.61 | 4,788,020.28 | 5,318,907.33 |
| 13 | 34 | 0.00 | 2,857,674.31 | 3,912,310.85 | 4,574,589.18 | 4,057,674.31 | 5,112,310.85 | 5,774,589.18 |
| 14 | 35 | 0.00 | 3,000,230.08 | 4,266,047.01 | 5,080,851.71 | 4,200,230.08 | 5,466,047.01 | 6,280,851.71 |
| 15 | 36 | 0.00 | 3,149,970.66 | 4,651,902.41 | 5,643,309.39 | 4,349,970.66 | 5,851,902.41 | 6,843,309.39 |
| 16 | 37 | 0.00 | 3,307,111.07 | 5,072,643.32 | 6,268,048.18 | 4,507,111.07 | 6,272,643.32 | 7,468,048.18 |
| 17 | 38 | 0.00 | 3,472,171.35 | 5,531,587.50 | 6,962,132.98 | 4,672,171.35 | 6,731,587.50 | 8,162,132.98 |
| 18 | 39 | 0.00 | 3,645,403.57 | 6,032,053.65 | 7,733,109.50 | 4,845,403.57 | 7,232,053.65 | 8,933,109.50 |
| 19 | 40 | 0.00 | 3,827,219.60 | 6,577,811.95 | 8,589,512.73 | 5,027,219.60 | 7,777,811.95 | 9,789,512.73 |
| 20 | 41 | 0.00 | 4,018,052.05 | 7,172,974.94 | 9,540,825.03 | 5,218,052.05 | 8,372,974.94 | 10,740,825.03 |
| 34 | 55 | 0.00 | 7,923,109.28 | 24,120,738.32 | 41,536,221.65 | 9,123,109.28 | 25,320,738.32 | 42,736,221.65 |
| 39 | 60 | 0.00 | 10,080,462.27 | 37,193,187.80 | 70,248,161.95 | 11,280,462.27 | 38,393,187.80 | 71,448,161.95 |
| 44 | 65 | 0.00 | 12,806,983.22 | 57,345,505.33 | 118,810,955.56 | 14,006,983.22 | 58,545,505.33 | 120,010,955.56 |
| 49 | 70 | 0.00 | 16,240,944.72 | 88,408,424.81 | 200,950,604.70 | 17,440,944.72 | 89,608,424.81 | 202,150,604.70 |
| 59 | 80 | 0.00 | 25,937,454.09 | 210,095,207.65 | 574,932,179.55 | 27,137,454.09 | 211,295,207.65 | 576,132,179.55 |
You may say that PHp20,000 every month is such a huge amount when very little is left from your salary.
Let me share with you what Robert Kiyosaki said.
"The philosophy of the rich and the poor is this:
The rich invest their money and spend what is left.
The poor spend their money and invest what is left."
If you want to be rich, make investment your SECOND expense. Make tithing your FIRST. Then live on what is left.
I Would Have Been a Multimillionaire Now
Based on the computation above, if I invested my money in the stock market through a VUL earning an interest of 10% every year, and compounded over time, I would have had Php4.5M today that I am 34.
Whew! That could have been a lot of money!
By the time I reach 40, I would have had almost Php8.5M in my investment portfolio.
What to do with Php8.4M?
I can build a simple Php2M house for my parents, and reinvest the remaining Php6M to continue growing through compounded interest and use it for my retirement when I reach 60.
Or better yet, I can retire right now with that amount and just live on the interest. But...
Right Now, I Could Only WISH that I Knew Then What I Know Now
If I did, I would not be spending time in a day job anymore. I would probably be staying at home, just chasing Pokemons while my kids are in school, and my husband is at work.
But There is Always a Reason to Trust in God's Timing
I have always believed that I am exactly where God wants me to be.
Thinking about it now, I realized that if I learned about investing thirteen years ago and started growing my wealth even before I was married, I will not know about the pain of being away from my kids on some nights because I finish work late in the evening.
My eight-year old Gaby will probably be used to seeing me everyday that she will never ask me to clear my schedule on weekends. (Yes, on Friday nights, she asks me to just stay at home for the weekend and do nothing else but be with them.)
My four-year old Elise would not question why I am unable to drive her to school at 12nn when I am able to drive Ate at 8am.
Oh, the pain of being a working mom, and this pain forces me to grow, even until today.
If I learned about investing thirteen years ago, I would not have workmates taking care of their families through getting life insurance and starting to build their retirement fund NOW.
If I learned about investing thirteen years ago, I would have not realized my talent for writing and this blog will be non-existent.
If I learned about investing thirteen years ago, I would not have developed my passion for spreading financial literacy with the dream of making it my profession someday.
If I learned about investing, I will not be receiving overwhelming messages of how I have inspired others with what I do and what I write about, which I believe is my purpose in life.
The list goes on...
And I thank God, not because I did not learn about investing thirteen years ago, but because I am exactly where He wants me to be -- taking this financial journey with you.
I Choose to have No Regrets
My post in the past was this, "I wish I knew then what I know now."
Today, it has become, "There is a reason why I learned about this just now."
And the moment I began learning about investment, I acted on it ASAP. I did not dilly dally, nor did I procrastinate.
The key to investing is simple. It's TIME. So, I urge you, now that you have learned the value of investment and how it can do so many beautiful things for your life, PLEASE start your investment journey.
Not thirteen years after.
But TODAY.
Be very blessed!
P.S. I hope you find this post helpful. And if you do, kindly click the SHARE buttons. Thanks!
