A couple of days ago, I came across a Facebook post about purchasing the latest gadget instead of investing in the stock market with your Christmas bonus. The latest gadget "then" was the Nokia N95.
Maybe many of you do not know this unit because it was released in the Philippines back in 2007, but it was the "latest" model of its time. Simply put, it was like the iPhone 6 Plus or Samsung Galaxy S6 Edge Plus TODAY.
I remember owning a Nokia N95 myself during that time when working hard and spending harder were the only two things I know that has something to do with money. It costs more or less Php35,000. Being with a new company for only a year then, that amount almost equals my salary for four months!
Now, I have no idea where my Nokia N95 went. I am not sure if I misplaced it, sold it at a lot cheaper price or simply gave it away -- and that was my four months of hard work going down the drain. Ouch!
If I invested my Php35,000 in the stock market instead, that would have been Php150,000 today with my small investment growing at 20% average per year with the power of compounded interest. Wow!
That is delayed gratification.
And recently, the Samsung Galaxy S6 Plus Edge has arrived. And yes, it was such a beauty -- and appears to be very functional, too. With all of it's features, I told myself that I wanted to buy one when the 13th month bonus arrives, that maybe I can actually "splurge on impulse" just like everyone does.
Fortunately, I came to my senses the following day and changed my mind. I told myself that I have graduated from being an impulsive buyer and that I am sticking with my long term plans.
Why Get a New Phone When the Old One Still Works?
Over dinner one night, my husband was telling me that we can get a postpaid plan with Php1999 monthly so that we can upgrade our phones. But then I told him that I don't need another plan, and that I am okay with my current plan that I get to enjoy for FREE because it is shouldered by the company. Besides, I am still okay with my current phone which I purchased more than a year ago. It has all the features that I need.
What I love most about my phone is that even if my kids would accidentally drop my phone on the floor, IT IS OKAY. They've actually dropped it more than a couple of times and it's no big deal.
And my husband agreed that a new phone would only mean an additional expense. That Plan 1999 for each would cost us almost Php4,000 per month or Php48,000 per year. Since it will be under contract for 2 years, that would be Php96,000 total at least. Wow! For a rank and file like me, or resident MD like my husband, Php96,000 is a lot of money!
After computing, my husband and I agreed that, yes, we are still okay with our old phones. We would rather spend on "stuff" that increases in value over time -- then maybe buy the latest phone from the interest.
Invest in the Future Before the Present
I think the problem why many of us would rather spend than save or invest is because we want instant gratification. We want to see or experience the fruits of our hard work NOW, and not later.
Second reason why we keep on spending is because we do not know where to put our money due to lack of financial education.
If you knew that you only need Php840 to own a small part of CEB (Cebu Pacific) and have 10 shares under your name, that will earn you passive income through dividends and capital appreciation over time, wouldn't you invest your small amount on that? Php840 equals 5 cups of your favorite signature frappe, by the way.
This is investing in the stock market directly. The easiest and most effective way of doing this is through the Strategic Averaging Method (SAM) which I learned through Bo Sanchez' Truly Rich Club. To know more about this, CLICK HERE.
Another way is doing it indirectly through a VUL. If you have dependents, this is the better way to invest because your investment comes with insurance. Insurance will not make you rich. But it makes sure that your dependents will not become poor when God calls you home while you are still in the process of building your wealth. Your investment, that is what will make you rich.
With Insular Life's Wealth Secure, you can invest in the TOP 10 companies of the PSE with as little as Php20,000 per year. If you simply want to grow your money, setting aside a minimum can be an option.
But I encourage you to talk to your trusted Financial Advisor first and discuss your long term goals with him/her. I got my first VUL in 2014, and this is where I build my retirement fund. Based on computations, considering inflation and time value of money, I can retire comfortably with 15M -- which is actually my target amount.
Later on, you can get another VUL, like what I did, investing just the minimum, which has the sole purpose of growing your money.
Read books, attend seminars, and have mentors. Invest in yourself because you are your greatest asset, and never stop learning.
Our small sacrifices today will mean a huge difference in the future. That is delayed gratification.
Make Your Choice Today
Will you buy the latest phone just because you want it and not really need it?
Do you still prefer instant gratification over delayed gratification?
Will you use your 13th month pay to start investing or simply spend it all?
Remember, in the future, when we are already rich, we can buy pretty much whatever our heart desires. Just remember that the main purpose of wealth is to love and serve others.
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